Coinbase Warns US “Rewards” Ban Could Let China Win the Stablecoin Race

Core Viewpoint - Coinbase has expressed concerns that new restrictions on stablecoin rewards in the U.S. could undermine its competitive position in digital payments, especially as China enhances its digital yuan to attract users [1][2]. Group 1: U.S. Regulatory Environment - The GENIUS Act, signed into law in July, establishes the first comprehensive framework for stablecoins in the U.S., setting reserve and compliance standards while prohibiting direct interest payments [4]. - Ongoing Senate negotiations on broader market structure legislation could further tilt the competitive landscape in favor of non-U.S. stablecoins and central bank digital currencies (CBDCs) [5]. Group 2: China's Digital Yuan Developments - The People's Bank of China announced a framework allowing commercial banks to pay interest on digital yuan wallet balances starting January 1, 2026, enhancing the digital yuan's role beyond just a cash substitute [3]. - By November 2025, the digital yuan had processed 3.48 billion transactions worth approximately $2.34 trillion across 230 million personal wallets and nearly 19 million corporate wallets [7]. Group 3: Industry Perspectives - Coinbase's chief policy officer highlighted that limiting rewards could diminish the attractiveness of dollar-backed stablecoins in international markets [1][2]. - Stablecoin platforms argue that sharing returns with users through rewards is essential for maintaining product appeal [6].