{"id":65913,"date":"2026-01-01T04:01:31","date_gmt":"2026-01-01T04:01:31","guid":{"rendered":"https:\/\/dogewisperer.com\/?p=65913"},"modified":"2026-01-01T04:01:31","modified_gmt":"2026-01-01T04:01:31","slug":"us-banks-push-to-ban-stablecoin-rewards-could-hand-global-advantage-to-china-execs-warn","status":"publish","type":"post","link":"https:\/\/dogewisperer.com\/?p=65913","title":{"rendered":"US Banks\u2019 Push To Ban Stablecoin Rewards Could Hand Global Advantage To China, Execs Warn"},"content":{"rendered":"
\n

After China\u2019s latest move with its Digital Yuan, multiple crypto industry executives have cautioned that the US banks\u2019 push to prohibit all interest payments on stablecoins could give a major advantage to their global rivals.<\/p>\n

US Risks Giving China A Major Global Advantage<\/h2>\n

On Tuesday, Coinbase\u2019s Chief Policy Officer (CPO), Faryar Shirzad, warned<\/a> the US Congress that banning interest payments on the digital assets could risk diminishing the legislative efforts and victories obtained this year with the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act.<\/p>\n

In an X post, Shirzad affirmed that \u201ctokenization is the future and the GENIUS Act was a visionary move by POTUS and Congress to ensure US dollar stablecoins issued under US rules would be the primary settlement instrument of the future.\u201d<\/p>\n

However, Shirzad noted that the \u201csobering and timely\u201d announcement by the People\u2019s Bank of China of its plan to pay interest on the Digital Yuan could pose a bigger problem to the US than investors think.<\/p>\n

As reported<\/a> by Bitcoinist, China is about to start paying interest on its Digital Yuan (e-CNY). Deputy Governor at the People\u2019s Bank of China, Lu Lei, recently shared a new framework that will redefine the rules of virtual currency, giving it the same legal status as deposits held at banks.<\/p>\n

Under the new framework<\/a>, commercial banks that manage Digital Yuan wallets will be able to pay interest to clients based on the amount of e-CNY they hold, starting from January 1, 2026.<\/p>\n

Based on this, Shirzad cautioned that \u201cIf this issue is mishandled in Senate negotiations on the market structure bill, it could hand our global rivals a big assist in giving non-US stablecoins and CBDCs a critical competitive advantage at the worst possible time.\u201d<\/p>\n

Stablecoin Rewards: A \u2018Matter Of National Security\u2019<\/h2>\n

Coinbase\u2019s CPO added that although \u201clobbyists for entrenched incumbents will always fight change,\u201d it\u2019s crucial for Congress to \u201cprotect the primacy of the US dollar and the US financial system, \u201cnot just incumbent interests.\u201d<\/p>\n

Similarly, other crypto executives agreed with Shirzad\u2019s statement, including Coinbase\u2019s Chief Executive Officer (CEO) Brian Armstrong and Variant\u2019s Chief Legal Officer (CLO) Jake Chervinsky.<\/p>\n

Armstrong emphasized<\/a> that US \u201cstablecoins must remain competitive on a global stage. Meanwhile, Chervinsky asserted that banks\u2019 push to ban stablecoin rewards \u201cisn\u2019t just a matter of incumbents seeking a regulatory moat. It\u2019s a matter of national security.\u201d<\/p>\n

To the lawyer, revisiting<\/a> the issue of interest payments on USD-pegged tokens would weaken the victory that the GENIUS Act gave to US dollar dominance worldwide and \u201chand that win to China.\u201d<\/p>\n

Notably, the banking sector has criticized the US\u2019s landmark stablecoin legislation over the past few months, arguing that it has loopholes that could pose risks to the financial system.<\/p>\n

The crypto framework, which was signed into law by President Trump in July, prohibits interest payments on the holding or use of payment-purpose stablecoins. Nonetheless, the prohibition only addresses issuers, meaning that it could be \u201ceasily circumvented\u201d by exchanges or affiliates providing rewards.<\/p>\n

Earlier this year, multiple banking associations across the US sent a joint letter to the Senate Banking Committee urging Congress to amend the law. The banking groups claimed that interest payments would distort market dynamics and could affect credit creation. Therefore, they suggested extending the prohibition to include digital asset exchanges, brokers, dealers, and related entities.<\/p>\n

Shirzad, alongside multiple crypto industry players, has rejected<\/a> these concerns over the past several months, stating that the banking sector\u2019s proposals could threaten to create an uncompetitive environment for USD-denominated tokens.<\/p>\n

In October, Coinbase\u2019s CPO slammed the financial institution\u2019s narrative that stablecoins would destroy bank lending, concluding that it \u201cignores reality\u201d and misreads the crucial moment.<\/p>\n

\"stablecoin,<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

After China\u2019s latest move with its Digital Yuan, multiple crypto industry executives have cautioned that the US banks\u2019 push to prohibit all interest payments on stablecoins could give a major advantage to their global rivals. US Risks Giving China A Major Global Advantage On Tuesday, Coinbase\u2019s Chief Policy Officer (CPO), Faryar Shirzad, warned the US […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"iawp_total_views":0,"footnotes":""},"categories":[2],"tags":[3,4,5],"class_list":["post-65913","post","type-post","status-publish","format-standard","hentry","category-news","tag-crypto","tag-doge","tag-news"],"_links":{"self":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/65913","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=65913"}],"version-history":[{"count":0,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/65913\/revisions"}],"wp:attachment":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=65913"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=65913"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=65913"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}