Coinbase CEO Brian Armstrong said any attempt to reopen the GENIUS Act would cross a “red line,” accusing banks of using political pressure to block competition from stablecoins and fintech platforms.
In a Sunday post about “We will not allow anyone to reopen GENIUS,” he wrote.
“My prediction is that banks will actually change their minds and push for the interest and yield paying ability of stablecoins in a few years, once they realize how big the opportunity is for them. So it’s 100% wasted effort on their part (as well as being unethical),” Armstrong added.
The GENIUS Act, passed after months of negotiations, prohibits stablecoin issuers from paying interest directly but allows platforms and third parties to offer rewards.
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Banking Lobby Targets “Rewards” of Stablecoins
Armstrong’s comments came in response to a post by Max Avery, board member and business development executive at Digital Ascension Group, who outlined why parts of the banking sector are lobbying MPs to review the legislation.
Avery argued that the proposed amendments would go beyond prohibiting direct interest payments by stablecoin issuers and instead restrict “rewards” more broadly, eliminating indirect performance sharing mechanisms offered by platforms and third parties.
Avery noted that while banks currently earn about 4% on reserves deposited at the Federal Reserve, consumers often receive close to zero in traditional savings accounts. Stablecoin platforms, he said, threaten that model by offering to share some of that performance with users.
“They call it a ‘security concern.’ They are concerned about ‘community bank deposits,’” he wrote, adding that an independent investigation “shows no evidence of disproportionate outflows of deposits from community banks.”
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US lawmakers propose tax relief for stablecoin payments
Last week, the US revised a discussion draft aimed at reducing the tax burden on everyday cryptocurrency users by exempting small stablecoin transactions from capital gains taxes. The proposal, introduced by Representatives Max Miller and Steven Horsford, would allow payments of up to $200 in regulated stablecoins pegged to the dollar to avoid recognition of profits or losses.
Beyond payments, the bill addresses tax issues related to gambling and mining by allowing taxpayers to defer income recognition on rewards for up to five years.
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