A senior Coinbase executive warns that changing the stablecoin legal framework in the US could weaken Washington’s position in the global digital payment race, especially as China is ramping up the competitive strength of its central bank digital currency (CBDC).
On X, Coinbase Policy Director Faryar Shirzad stated that the controversy over whether stablecoins issued in the US are allowed to offer “rewards” under the GENIUS Act could diminish the appeal of USD-pegged stablecoins. He cited an example where the People’s Bank of China recently announced a mechanism allowing commercial banks to pay interest on digital yuan wallet balances (e-CNY) starting from 2026, thereby elevating the role of e-CNY from “digital cash” to “digital deposits.”
While the GENIUS Act prohibits direct interest payments on stablecoins, the law still permits platforms or third parties to offer rewards. Coinbase warns that if Congress mishandles this issue, the US could inadvertently give a competitive advantage to stablecoins outside the US and CBDCs at the most sensitive time.
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