Coinbase CEO Distinguishes Banks From Stablecoins in Lending Practices

Coinbase CEO Brian Armstrong highlighted a key difference between banks and fully reserved stablecoins in how they use customer funds. Speaking on 'Money Rehab with Nicole Lapin', Armstrong said banks can lend deposits, but fully reserved stablecoins are not used for fractional-reserve lending.

The distinction is centered around the use of customer funds and reserve assets. Banks can lend deposits, whereas fully reserved stablecoins are structured to support redemption at a value matching the tokens in circulation.

Armstrong's comments frame the issue as a question of whether rewards offered by exchanges or other intermediaries should be treated similarly to interest paid on bank deposits. This is a central point of debate in policy discussions over stablecoin rewards, particularly since the GENIUS Act became law in July 2025.