Coinbase CEO Warns Against Revising GENIUS Act

Coinbase CEO Brian Armstrong is of the opinion that attempting to reopen the GENIUS Act for stablecoins would mean crossing a “red line.” He made this statement in response to the numerous efforts being made by banks to block the regulation and stifle competition, including lobbying Congress.

Coinbase Stands Against GENIUS Act Revision

In the last few months, there have been strong attempts from banks to block competition from stablecoins and fintech platforms

A number of these financial institutions have asked that the GENIUS Act, which was debuted only a few months ago, be reopened for adjustments. However, the Coinbase CEO has stated that making such a move would amount to crossing a “red line.”

Armstrong took to X recently to say that he was quite “impressed” that banks could lobby Congress so openly without backlash

At the same time, the crypto boss made it clear that his crypto exchange, Coinbase, would not relent from pushing back on efforts to revise the GENIUS Act. “We won’t let anyone reopen GENIUS,” Coinbase CEO wrote on X.

GENIUS Act Loopholes Could Weaken Community Banks

Last September, Republican state senator from Alabama’s 12th district, Keith Kelley, raised urgent concerns about the potential negative effects of the federal stablecoin legislation. He pointed out that the bill allows crypto platforms to distribute financial incentives. In Kelley’s opinion, this encourages account holders to withdraw funds or close accounts at small community banks

“Unlike large banks, community banks depend on local deposits to fund their lending,” Kelley explained. Once there is a decline in deposits, the banks’ ability to offer loans to individuals, families, and small businesses will be significantly restricted. In other words, the GENIUS Act loopholes could weaken community banks.

Max Avery, a board member and business development executive at Digital Ascension Group, has also talked about how banks are planning to ban direct interest payments by stablecoin issuers and instead restrict “rewards” more broadly.

Will the GENIUS Act Situation Flip?

This resistance may not stand for a very long time, especially “if they realize how big the opportunity is for them,” Armstrong said, referring to the banks

Once it gets to this point, it may become the case of lobbying for the ability to pay interest and yield on stablecoins

Meanwhile, the stablecoin adoption move is expanding at an alarming rate. In mid-December, Visa strengthened its role in digital payments by launching a new stablecoins advisory practice. This initiative sits within Visa Consulting & Analytics, helping the company offer hands-on support to organizations that want to explore or adopt stablecoins.

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