Big Banks vs. Crypto: Trump, Coinbase CEO Battle Over Stablecoin Yields

by

Coinbase’s Armstrong says big banks are trying to choke off stablecoin yields

Coinbase CEO Brian Armstrong claims that large banks are working against President Trump’s crypto goals. They’re supporting a proposal – the CLARITY Act – that would eliminate the current 4-5% returns offered by stablecoins, which currently contribute $1.35 billion to Coinbase’s revenue.

Summary

  • Coinbase CEO Brian Armstrong says big banks are “undermining” President Trump’s crypto agenda by trying to ban yield on stablecoins.
  • The fight centers on whether platforms like Coinbase can share 4–5% Treasury returns on stablecoins with users under the GENIUS and CLARITY Acts.
  • Banks warn trillions in deposits could migrate to crypto if yields are allowed, while Coinbase defends a $1.35 billion stablecoin revenue stream.

Coinbase CEO Brian Armstrong recently told Fox Business that large U.S. banks are attempting to hinder President Biden’s plans for cryptocurrency. He claims they’re lobbying to prevent Americans from earning rewards on their stablecoins. Armstrong called a recent Senate proposal a win for banks, arguing it would eliminate competition by effectively banning interest on digital dollars. He believes this would transfer money from everyday citizens to already profitable large banks.

Earning interest on stablecoins is just the beginning. What’s really at stake is whether we widen or close the wealth gap. The Genius Act, while promising, won’t help if you miss out, so it’s important to be patient.

— Wendy O (@CryptoWendyO) March 27, 2026

The 2025 GENIUS Act requires stablecoin companies to fully back their tokens with cash or short-term government bonds and prevents them from paying interest directly to customers. However, exchanges like Coinbase have been able to offer customers rewards programs that effectively share the returns from those government bonds – around 4-5%. A proposed compromise to a new bill, the CLARITY Act, aims to stop all forms of yield on stablecoins – whether paid directly, indirectly, or through rewards – allowing only rewards based on user activity. Coinbase has informed senators that it opposes this latest version of the bill.

Trump’s Support and the Banking Lobby’s Fears

As a crypto investor, I was pretty surprised to see Donald Trump coming out in support of crypto companies. He’s been publicly calling out banks, claiming they’re trying to kill the GENIUS Act and stall the CLARITY Act, specifically over the issue of stablecoin yields. He basically said we should be able to earn money on our crypto, and wants Congress to get this market structure bill passed quickly. Apparently, the banks are worried that if stablecoins can offer decent yields, people might pull hundreds of billions of dollars out of traditional banks, which could really hurt smaller banks and their ability to lend money. It’s a classic case of traditional finance pushing back against disruption, as I see it.

The large sums of money involved help explain why this is such a big deal. In 2025, Coinbase made about $1.35 billion from stablecoins – nearly 19% of its total revenue – primarily through interest earned on its USDC reserves, which are backed by U.S. Treasury bonds. Overall, around $33 trillion in stablecoins were traded last year, with USDC representing about $18.3 trillion of that amount. According to analysts at Bloomberg Intelligence, if more people start using USDC for payments, Coinbase could see its stablecoin revenue increase by two to seven times what it made in 2025.

Currently, the debate over stablecoin yields is central to U.S. crypto regulation. Banks are pushing to eliminate what they see as an unfair advantage, while crypto companies are trying to maintain a key source of income and the attractive 4-5% returns they offer users. With former President Trump publicly urging banks to take action and Coinbase CEO Brian Armstrong raising concerns about regulatory bias, the final form of the proposed GENIUS-CLARITY framework will decide if stablecoins continue to offer high returns or simply become low-yield digital cash.

Read More

2026-03-27 18:02