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Coinbase Defends Stablecoin Rewards Amid Bank Lobby Pushback

Coinbase has firmly opposed recent efforts by banking associations to impose restrictions on stablecoin reward programs.

The crypto exchange argues that these initiatives misinterpret the GENIUS Act by labeling merchant discounts as illegal "indirect interest."

Faryar Shirzad, Coinbase's Chief Policy Officer, clarified that Congress intended for the act to prohibit only interest paid by stablecoin issuers directly.

Bank lobbyists, including the American Bankers Association, have urged the Treasury to broaden the definition of interest to include various economic benefits.

Their concerns suggest that allowing stablecoin interest payments could destabilize community banks, leading to significant losses in lending capacity.

Coinbase's position highlights the potential benefits of stablecoins, citing how they could help merchants save on credit card transaction fees.

The exchange recently launched a competitive savings account for UK users, showcasing its commitment to innovation in the financial sector.

Shirzad also criticized the Bank of England's proposed caps on stablecoin holdings, stating that such limits could hinder market growth.

With projections indicating substantial international demand for stablecoins, Coinbase emphasizes the need for regulatory clarity.

The ongoing debate will significantly shape the future landscape of stablecoin use and its integration within the broader financial ecosystem.