Coinbase executive: Amendments to the GENIUS Act could give China an advantage in global payment competition

Coinbase Chief Policy Officer Faryar Shirzad recently stated on social media that modifications to the GENIUS Act by the U.S. Congress could weaken the competitiveness of the U.S. dollar stablecoin in the global payments arena, while China is enhancing the appeal of its digital yuan through interest payments on digital yuan wallet balances.

The People's Bank of China announced this week that starting January 1, 2026, it will allow commercial banks to pay interest on digital yuan wallet balances. PBOC Vice Governor Lu Lei stated that this initiative 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 capabilities.

The GENIUS Act was passed in June this year, establishing reserve and compliance rules for stablecoins, but prohibiting issuers from paying direct interest, allowing only platforms and third parties to provide rewards linked to the use of stablecoins. Shirzad warned that if the Senate mishandles negotiations on the market structure bill, it could provide a competitive advantage to countries like China.

Coinbase CEO Brian Armstrong stated last week that any attempts to revise the GENIUS Act are a "red line," accusing the banking industry of lobbying Congress to restrict stablecoin rewards to protect its deposit base. He believes that the banks' judgment on this issue is misguided and predicts that banks will ultimately compete to offer interest and returns on stablecoins. Previously, Lu Lei mentioned that the "Action Plan" to be implemented on January 1, 2026, clearly states that digital yuan wallet balances can earn interest.