Coinbase executives warn that US stablecoin policies could give China an advantage in global payments competition.
PANews reported on December 31 that Coinbase Chief Policy Officer Faryar Shirzad recently stated on social media that the US Congress's amendments to the GENIUS Act may weaken the competitiveness of dollar-denominated stablecoins in the global payments sector, while China is enhancing their attractiveness through the interest payment function of the digital yuan.
The People's Bank of China (PBOC) announced this week that, starting January 1, 2026, commercial banks will be allowed to pay interest on balances in their digital yuan wallets. PBOC Vice Governor Lu Lei stated that this move will propel the digital yuan from the era of "digital cash" to the era of "digital deposit currency," further expanding its value storage and cross-border payment functions.
The GENIUS Act, passed in June of this year, establishes reserve and compliance rules for stablecoins, but prohibits issuers from paying direct interest, allowing only platforms and third parties to offer rewards pegged to stablecoin usage. Shirzad warned that mishandling the negotiations of the market structure bill could give countries like China a competitive advantage.
Coinbase CEO Brian Armstrong stated last week that any attempt to revise the GENIUS Act is a "red line," and accused the banking industry of lobbying Congress to limit stablecoin rewards to protect their deposit base. He believes the banks are misjudging the issue and predicts they will eventually scramble to offer interest and yields on stablecoins.
According to previous reports, Lu Lei stated that the "Action Plan" to be implemented from January 1, 2026, clearly stipulates that the balance of digital RMB wallets can accrue interest .
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