Coinbase CEO Brian Armstrong points to China as an example for American stablecoin policy. The timing of his remarks raises questions about his intentions.
Armstrong's defense of the interest rate on China's central bank digital currency now comes as his company seeks to maintain a key revenue source threatened by the American banking lobby. The GENIUS Act, passed in July last year, allows platforms like Coinbase to share returns with stablecoin holders—a provision that banking groups now want to eliminate.
This is what Armstrong said
Armstrong spoke on X on January 8 and praised China's approach to their digital currency. "China has decided to pay interest on their own stablecoin because it helps ordinary people and they see it as a competitive advantage," he wrote. "I worry that the U.S. is losing sight of the big picture."
In his view, allowing rewards on stablecoins would help ordinary Americans without harming banks, and he called for "giving the market both options."
China's response
But in China, people were surprised. Crypto analyst Phyrex pointed out that Armstrong made a key mistake: the digital yuan is not a stablecoin.
According to Phyrex, the interest payments mainly indicate low adoption. The yuan on major payment platforms like WeChat Pay and Alipay generates interest, while the digital yuan initially offered no interest. This gave users little incentive to switch. The interest program that started on January 1 is subsidized by commercial banks, not the central bank. The rates are likely lower than those of regular savings accounts.
The GENIUS Act debate
Armstrong's statements come amid a fierce lobbying battle over U.S. stablecoin regulations.
The GENIUS Act, passed in July 2025, prohibits stablecoin issuers from directly paying interest to holders, but allows other platforms, such as exchanges, to share returns with users through a "reward program." This was favorable for platforms like Coinbase.
The banking lobby pushed back strongly. In November, the American Bankers Association and 52 state bank associations sent a letter to the Department of the Treasury urging them to close this "backdoor." According to them, stablecoin platforms offering high yields could lead to massive outflows from banks, potentially reducing lending by up to $6.6 trillion.
This week, lobbying continued. On January 7, over 200 regional bank leaders sent a letter to the Senate requesting that the interest restrictions in the GENIUS Act be extended to partners and sister companies of stablecoin issuers.
Armstrong responded on December 26. He described attempts to reopen the GENIUS Act as a "line" that must not be crossed. He also criticized banks that earn around 4% on their reserves at the Federal Reserve while paying almost nothing to their savers, accusing banks of "mental gymnastics" when presenting yield restrictions as safety measures.
The limits of the China comparison
By bringing China into the discussion, Armstrong appears primarily to be painting a competitiveness narrative: if China can do it, why can't the U.S.?
This comparison has drawn criticism. A CBDC and a private stablecoin are very different things—the digital yuan is a legal tender issued by China's central bank, while USDC and USDT are private coins pegged to the dollar. Critics like Phyrex argue that the interest program mainly highlights the adoption challenges of the digital yuan, not a competitive advantage.
Yet Armstrong's broader point—that sharing returns helps ordinary people and shouldn't be unnecessarily restricted—sounds logical to many, regardless of whether his China example is accurate. Ultimately, the debate in the U.S. centers on a different question: how much room should private platforms have to compete with banks for customers' savings?