$USDC Rewards Not Deposits, Says Coinbase's Armstrong

Coinbase CEO Brian Armstrong has spoken out against the idea that stablecoin rewards should face similar regulations as banks. He argues that $USDC rewards, which are issued by Circle and offered to users through Coinbase, largely pass through the economic returns generated by the assets backing the stablecoin, including short-term U.S. Treasuries.

'If you want to hold a stablecoin, you could actually earn reward,' Armstrong said. 'Why shouldn't consumers be able to benefit from that?'

The issue of stablecoin rewards has emerged as a major battleground in Washington, with banks warning that higher-paying digital dollars could pull deposits away from the traditional financial system.