He emphasized that stablecoins present an opportunity for banks instead of posing a danger, pointing out that while the average interest on traditional savings accounts is about 14 basis points, consumers can receive nearly 3.8% through rewards from stablecoins.
He asserted that Congress should establish a fair competitive environment for all American businesses, allowing market forces to dictate product success instead of letting established banks “tilt the scales.”
In response to worries that funds shifting from banks to stablecoins might destabilize the economy, Armstrong highlighted the essential role banks play in lending but clarified that crypto firms do not engage in fractional reserve banking.
He explained that stablecoins are fully backed by reserves on a one-to-one basis and, according to proposed regulations like the GENIUS framework, would be maintained in short-term U.S. Treasurys, which he viewed as a more secure option for consumers to keep their money. Armstrong also mentioned that crypto companies should have the capability to offer loans just like traditional banks.
Armstrong noted that Coinbase will persist in urging lawmakers to act swiftly while making sure that any resulting legislation ultimately benefits consumers. He expressed that he would prefer no legislation over a poorly designed one, indicating that the current draft under consideration could potentially eliminate three or four of Coinbase’s existing product offerings.