Big Banks Target Stablecoin Yields, Claims Coinbase CEO

Coinbase CEO Brian Armstrong has accused major U.S. banks of trying to undermine the crypto agenda supported by President Trump by promoting legislation that would eliminate yields on stablecoins. This change could significantly impact Coinbase's revenue, which has been bolstered by stablecoin yields. Armstrong argues that the banks' actions serve to profit them at the expense of consumers.

Key Takeaways

Coinbase CEO Brian Armstrong criticizes big banks for promoting legislation that bans stablecoin yields.
The proposed CLARITY Act would restrict how stablecoin issuers can function, especially concerning interest payments.
President Trump has expressed support for the crypto industry, warning that banks could lose billions if these changes are enacted.
The outcome of this legislative push will impact the competitive landscape between banks and crypto platforms.

Coinbase CEO challenges bank push to ban stablecoin yields

Armstrong's Allegations Against Banks

In a recent interview on Fox Business, Brian Armstrong, the CEO of Coinbase, argued that major banks in the United States are deliberately attempting to undermine the crypto initiatives championed by President Trump. He believes these banks are working to prevent Americans from earning yields on stablecoins, which currently contribute significantly to Coinbase’s annual revenue of $1.35 billion. Armstrong called the latest Senate draft a "giveaway to the banks," which would effectively eliminate competition by removing yields on digital currencies. He pointed out that banks are taking money from hardworking Americans and funneling it into their own record profits.

Understanding the Legislative Context

Under the proposed 2025 GENIUS Act, stablecoin issuers would be required to fully back their tokens with cash or short-term Treasuries and would be prohibited from directly offering interest. However, exchanges like Coinbase would still be allowed to offer customers returns of around 4-5% through rewards programs linked to Treasury returns. The current CLARITY Act proposal circulating in Washington would further restrict this by banning all stablecoin yields—whether direct, indirect, or through equivalents—while only allowing rewards based on specific activities. Coinbase has conveyed to senators that the platform cannot support the existing wording of this bill.

Political and Financial Implications

Former President Donald Trump has publicly aligned himself with cryptocurrency firms, arguing on Truth Social that banks are "threatening and undermining" the GENIUS Act and holding the CLARITY Act hostage over the issue of stablecoin yields. Trump emphasized that "Americans should earn money on their money" and urged Congress to expedite the bill. Reports from Bloomberg indicate that banks are concerned they could lose hundreds of billions in deposits if stablecoin yields are allowed, which could adversely affect smaller institutions and their loan funding capabilities.

The stakes are significant. Coinbase reported generating about $1.35 billion from stablecoin revenue in 2025, which made up roughly 19% of their total revenue, largely fueled by interest from USDC reserves linked to U.S. Treasuries. The overall stablecoin volume reached about $33 trillion last year, with USDC comprising approximately $18.3 trillion of that total. Analysts from Bloomberg Intelligence predict that if USDC payment use accelerates, Coinbase's stablecoin revenue could grow from two to seven times its 2025 figures.

At present, the battle over yields has become a central issue in U.S. crypto policy. On one side, banks are lobbying to close what they call a “loophole,” while on the other, crypto platforms are fighting to maintain essential revenue streams and the attractive 4-5% returns for their users. As Trump continues to put pressure on financial institutions and Armstrong raises concerns about "regulatory capture," the future of the GENIUS-CLARITY framework will be crucial in determining whether stablecoins can remain a profitable alternative to traditional bank deposits or revert to being low-yield digital cash.