**[Coinbase CEO Responds to Stablecoin Rewards Controversy: Fundamentally Different from Bank Interest, No Need to Apply Bank Capital Liquidity Requirements]** BlockBeats News, September 22 — Coinbase CEO Brian Armstrong recently addressed the differences between USDC holder rewards and bank interest, as well as whether Coinbase should comply with bank capital and liquidity regulatory requirements, during an appearance on the *Money Rehab* podcast. Armstrong explained that users holding USDC on Coinbase receive "rewards," not interest. The underlying dollars are invested in short-term U.S. Treasury bonds (yielding approximately 3.5%-4%), with a portion of the returns passed back to users, akin to a loyalty program. Bank interest, on the other hand, stems from the fractional reserve system, where banks lend out customer funds and assume corresponding risks. To clearly differentiate, Coinbase deliberately uses the term "rewards." Regarding the argument that crypto platforms should adhere to the same capital, liquidity, and FDIC insurance rules as banks, Armstrong emphasized that stablecoins under the *GENIUS Act* must maintain 100% reserves, with funds held in short-term U.S. Treasuries. This eliminates fractional reserve risks and prevents bank-style runs. Banks are subject to strict regulations due to their higher business risks, whereas the structure of stablecoins is fundamentally different. He criticized certain large banks for lobbying to restrict competition, claiming such actions harm consumer interests. Armstrong also noted that Coinbase is actively helping community banks and major banks integrate stablecoin technology, aiming for mutual benefits across all parties. This statement comes as the *Clarity Act* faces obstacles in the Senate. Armstrong expressed confidence that, whether through legislation or regulatory agency rules, regulatory clarity for crypto in the U.S. will eventually be achieved. [Original Link]