Coinbase Executive Warns US Stablecoin Policy May Give China Competitive Edge in Global Payment Competition

In a recent social media post, Coinbase Chief Policy Officer Faryar Shirzad warned that modifications to the GENIUS Act by the US Congress could weaken the competitiveness of the US dollar stablecoin in the global payment arena, while China is enhancing its attractiveness through the interest payment feature of the digital yuan.

The People's Bank of China announced this week that starting January 1, 2026, commercial banks will be allowed to pay interest on digital yuan wallet balances. PBOC Deputy Governor Lu Lei stated that this move will transition the digital yuan from the 'digital cash' era to the 'digital deposit currency' era, further expanding its value storage and cross-border payment functions. The GENIUS Act, passed in June this year, established reserve and compliance rules for stablecoins, but prohibits issuers from directly paying interest, only allowing platforms and third parties to provide rewards linked to stablecoin usage. Shirzad warned that improper handling of the stablecoin issue in the negotiations of the market structure bill by the Senate could provide a competitive advantage to countries like China.

Coinbase CEO Brian Armstrong stated last week that any attempts to amend the GENIUS Act are a 'red line,' and criticized the banking industry for lobbying Congress to restrict stablecoin rewards to protect their deposit base. He believes that banks' judgment on this issue is wrong and predicts that banks will eventually rush to offer interest and returns for stablecoins. Earlier reports indicated that starting January 1, 2026, the 'Action Plan' implemented by Lu Lei clearly allows interest to be earned on digital yuan wallet balances.

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