Coinbase CEO Brian Armstrong Warns: China’s Stablecoin Move Is a Wake-Up Call for the West
Brian Armstrong isn't mincing words. The Coinbase CEO just issued a stark warning to U.S. regulators and the broader crypto industry: China's aggressive push into stablecoins should serve as a five-alarm fire.
The Geopolitical Chess Move
Forget mining bans and trading crackdowns. China's latest maneuver flips the script entirely—launching a state-backed digital currency designed to bypass the global dollar system. It's a direct challenge to Western financial hegemony, wrapped in blockchain packaging.
Regulatory Paralysis Meets Real-World Threat
While U.S. lawmakers debate committee assignments and draft discussion papers, Beijing executes. Armstrong's message cuts through the noise: innovation won't wait for comfortable consensus. The nation that controls the dominant stablecoin could rewrite the rules of global trade, payments, and sanctions enforcement overnight.
The Innovation Imperative
This isn't about copying China's playbook. It's about outpacing it. Armstrong's wake-up call demands a regulatory framework that fosters dollar-aligned stablecoin innovation, not one that stifles it with compliance theater designed to protect legacy banking profits. The race isn't for the fastest blockchain—it's for the most trusted digital dollar.
Wake up or get left behind. The next reserve currency might not be printed on paper, but minted on a server farm—and right now, the West is hitting the snooze button while its biggest strategic competitor sets the alarm.
China’s Interest Model Sparks Concerns Over U.S. Competitive Edge
According to Brian Armstrong, China’s MOVE to pay interest on its state-backed digital currency is a strategic decision aimed at empowering citizens and gaining an advantage in the growing digital payments economy.
Faryar Shirzad, Chief Policy Officer at Coinbase, echoed this concern, warning that the U.S. risks falling behind.
“China understands the opportunity the bank lobby is poised to give them,” he said. “The Senate banning rewards would be a big assist to China’s efforts.”
As Coincentral outlined, stablecoins are increasingly viewed as a tool for real-world payments and programmable finance, especially with global competition rising.
Industry Pushback on Claims That Rewards Harm Bank Deposits
Bcking Brian Armstrong, Shirzad argued that the real concern among large banks is not financial stability but competition. He said banks oppose rewards because they threaten high-margin businesses, such as deposits and card fees. He pointed out that U.S. banks earn more than $360 billion per year from those services.
Shirzad cited recent research from Charles River Associates and Cornell University, both of which found no evidence that stablecoin rewards reduce community bank deposits or lending capacity. CRA’s data, as CNF reported, showed no link between USDC adoption and deposit outflows from smaller banks.
The Cornell study concluded that stablecoin rewards would need to approach 6% to meaningfully affect deposit levels. No such offers currently exist in the market.
Policymakers Urged to Uphold GENIUS Framework for Stablecoin Rewards
Shirzad also referred to the GENIUS legislation previously passed by Congress, which had resolved the issue of rewards by allowing them within certain guidelines. Reopening the debate now, he said, could lead to confusion and harm U.S. innovation.
He said, “Protecting GENIUS—and the ability to offer rewards—means lower costs, more choice, and a more competitive payments system for Americans.”
As CoinCentral detailed, stablecoin reward programs are often framed as consumer benefits and are being tested globally, with growing demand for programmable finance. Armstrong and Shirzad both called for regulatory clarity that allows fair competition while safeguarding innovation.
