Coinbase head Brian Armstrong said banning stablecoin rewards would “ironically” increase the company’s profitability. He even claims the policy hurts customers. This comes at a time when the crypto market is experiencing increased selling pressure and “extreme fear” sentiment.
In a recent post, Armstrong wrote that Coinbase would benefit financially if a ban on crypto rewards became law. This is because the exchange currently pays a large amount of compensation to its users for holding it. $USDC. The market capitalization of stablecoins has skyrocketed and hovers around $314 billion.
Coinbase protects $USDC generate a payout
“But we don’t want this to happen,” Coinbase’s CEO said in a post, because customers need to continue receiving rewards. He added that regulated US stablecoins should remain competitive globally. These comments came as lawmakers are debating provisions in a pending market structure bill that could limit the interest and fees paid on stablecoins.
Banks are reportedly requesting language prohibiting such payments. They claim that high-yielding stablecoins have the potential to draw deposits from insured lenders. In some ways, they argue, this could threaten financial stability. Meanwhile, crypto companies say rewards are essential to attract users and compete with offshore platforms.
Coinbase offers $USDC We offer compensation for featured headlines. As of February 2026, the platform is advertising a yield of 3.50% per year. $USDC Balanced. However, this benefit is limited to Coinbase One subscribers, which is a paid membership to the platform. Free accounts can no longer earn benefits.
Tether’s USDT is the largest stablecoin on the market. The circulation is over 183 billion copies. Circle’s $USDC It ranks second in circulation with over 73.4 billion copies. The stablecoin USD1, backed by the Trump family, has reached 5.28 billion coins.
Pay attention to Coinbase’s margins
From a financial perspective, the ban could reduce costs for Coinbase. Exchanges generate revenue from: $USDC It was held both on and off the platform. This is done through a partnership with our publishing company, Circle. Exchanges earn a portion of their interest income from the dollar reserves that back their stablecoins. If rewards were abolished, they would retain more of the profits rather than distribute a portion of that interest spread to users.
Data shows that the stablecoin business has increasingly contributed to Coinbase’s revenue mix. According to the company’s latest quarterly results, subscription and services revenue increased 13.5% to $727.4 million. Stablecoin revenue increased from $225.9 million to $364.1 million.
Amid this growth, Cryptopolitan reported that Coinbase posted a net loss of $666.7 million, or $2.49 per share, for the quarter ended December 31. As digital asset prices slumped in the last months of 2025, trading revenues declined significantly.
The global cryptocurrency market has retreated from its highs in early October. This was a response to President Donald Trump’s new tariffs on Chinese imports and expected export restrictions on critical software. Bitcoin price has fallen about 30% in the past 30 days. It is down more than 45% from its all-time high (ATH) of $126,198 recorded on October 7, 2025. At the time of writing, the average price of BTC is trading at $68,868.
The stablecoin debate is gaining attention among investors. The GENIUS Act, passed last year, created a federal framework for stablecoins. On the other hand, there is the Transparency Act, which aims to define the regulatory boundaries between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). It has stalled amid disagreements over stablecoin rewards.
Coinbase has withdrawn support due to certain provisions. This is cited as a reason for the delay. A recent White House meeting sought to iron out differences between banks and crypto companies. However, they were unable to make a breakthrough.