Coinbase CEO Issues Stark Warning: Reopening GENIUS Act is a ’Red Line’ for Crypto in 2025
Brian Armstrong draws a line in the sand. The Coinbase CEO's latest warning frames the potential revival of the GENIUS Act as an existential threat to the digital asset industry in 2025.
The Regulatory Flashpoint
Forget incremental policy tweaks—this is a full-scale showdown. The legislation, dormant but not dead, represents a regulatory approach the crypto sector thought it had moved past. Its return to the congressional agenda signals a potential pivot toward restrictive frameworks that could stifle innovation and push development offshore.
Why This Time is Different
Market maturity amplifies the stakes. With institutional capital now deeply embedded in crypto infrastructure, a legislative misstep wouldn't just rattle retail traders—it could trigger a capital flight measured in the tens of billions. The industry's growth has turned a theoretical policy risk into a tangible systemic one.
The Domino Effect
Crossing this 'red line' wouldn't operate in a vacuum. It risks triggering a cascade of similar restrictive measures globally, as other jurisdictions often look to U.S. policy for cues. The result? A fragmented global landscape where compliance costs soar and the promise of a borderless financial system evaporates—a classic case of regulators solving a problem that doesn't exist while creating several new ones, much to the delight of high-priced legal consultants.
The Stakes for 2025
The coming year becomes a litmus test. It will reveal whether U.S. policymakers view crypto as a sector to nurture or a threat to contain. The industry's response will be equally telling: adapt and comply, or innovate and relocate. One thing's certain—the gentle lobbying era is over. The battle lines are now drawn.
Threat to Stablecoin Rewards
The restrictions imposed by the GENIUS Act on stablecoin rewards have sparked a debate. Some people argue that these restrictions limit innovation. And also it reduces the consumer choice. Max Avery of Digital Ascension Group says that proposed amendments would broadly restrict rewards, also cutting off indirect yield-sharing mechanisms. This MOVE is viewed as an attempt by the banks to protect their interests.
Source: Yellow.comImpact on Consumers and Innovation
The stablecoin platforms offer users a chance to earn yield and threaten traditional banking models. Avery argues that banks are currently earning 4% on reserves at the Federal Reserve. Meanwhile, the consumers get near-zero interest on their savings.
The future of the GENIUS Act is uncertain. The lawmakers are proposing amendments, while Coinbase is pushing back against them. The US is also considering tax relief for stablecoin payments, which would exempt small transactions from capital gains taxes.
Related Developments
US lawmakers have proposed tax relief for stablecoin payments, which also aims to reduce the tax burden on crypto users. The proposal targets taxation issues around staking and mining, allowing taxpayers to defer income recognition on rewards.
