Coinbase CEO Brian Armstrong has predicted that in a few years banks will start lobbying for returns on stablecoins.
“My prediction is that the banks will actually turn around and start lobbying FOR the ability to pay interest and returns on stablecoins in a few years, once they realize how big the opportunity is for them,” Armstrong wrote in X on December 27. after.
Coinbase won’t let banks reopen GENIUS Act discussions
Amrstrong’s message was in response to a message from Digital Ascension Group Chief Business Development Officer Max Avery, who said the banking lobby wants to reopen discussions surrounding the GENIUS Act.
In particular, banks continue to express concerns that the current wording around stablecoin interest rates poses a risk to bank deposits, Avery said.
The GENIUS Act, the first regulatory framework for stablecoins and signed into law by US President Donald Trump in July, prohibits stablecoin issuers from offering returns directly to token holders. However, it does not extend this ban to third-party service providers, meaning stablecoin issuers can offer returns through these platforms.
For example, Coinbase offers traders and investors on its platforms returns on USDC, issued by the stablecoin firm Circle.
Concerns about the ability to potentially offer returns through third-party platforms have been raised by the banking lobby several times this year, Avery noted.
Regardless of the banking lobby’s ongoing concerns, Armstrong said in his response that he and Coinbase “will not let anyone reopen GENIUS,” adding that this is a “red line” for them.
After predicting that banks will eventually lobby for stablecoin revenues, he said the current opposition to the GENIUS Act is “100% wasted effort on their part.”
The Stablecoin market is expected to rise to $500 billion by the end of 2026
The regulatory clarity provided by the GENIUS Act served as a catalyst for the growth of the stablecoin market this year.
In 2025, the combined capitalization for stablecoins rose above $300 billion for the first time and currently stands at over $308.36 billion, DefiLlama data shows.
Market capitalization of Stablecoin (Source: DefiLlama)
Tether’s USDT token maintains a dominant market share with a capitalization of approximately $186.7 billion. USDC comes in second with a market capitalization of approximately $76.38 billion, while Ethena’s USDe ranks as the third largest stablecoin with a capitalization of $6.29 billion.
After what has been a strong year for stablecoins, industry experts believe that the growth of these tokens is expected to continue into 2026.
One of those experts is Joseph Chalom, co-CEO of SharpLink, who said the stablecoin market cap will reach $500 billion by the end of 2026.
“Global use cases for stablecoins, including cross-border fund transfers, retail payments and institutional transactions, will continue to grow, with Ethereum establishing itself as the fundamental settlement layer for the movement of value,” he said on X.
1/ The stablecoin market will reach $500 billion by the end of next year.
Global use cases of stablecoins, including cross-border fund transfers, retail payments and institutional transactions, will continue to expand, with Ethereum establishing itself as the fundamental settlement layer for…
— Joseph Chalom (@joechalom) December 26, 2025
He also said that major players will enter the stablecoin market next year, highlighting recent moves by JP Morgan, PayPal, Japan, South Korea and EU banks.
Chalom added that the adoption of stablecoins lays the foundation for broader adoption of cryptocurrencies among institutions.
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