Armstrong warns Senate: don't bail out banks by banning crypto rewards

Coinbase CEO Brian Armstrong issued a stark warning to the Senate, urging lawmakers not to bail out traditional banks by implementing cryptocurrency bans that would eliminate digital asset rewards programs. Armstrong's testimony directly challenges banking institutions' efforts to block stablecoin rewards, arguing that legacy financial systems are attempting to preserve their monopolistic control over consumer financial services.

The Coinbase executive's Senate appearance highlights escalating tensions between cryptocurrency exchanges and traditional banking sectors as DeFi platforms continue gaining market share. Armstrong emphasized that banning crypto rewards would effectively hand banks an undeserved bailout while stifling blockchain innovation and limiting consumer choice in digital finance.

This regulatory showdown comes as stablecoins and cryptocurrency rewards programs attract millions of users seeking higher yields than traditional savings accounts. Armstrong's defense of crypto rewards underscores the broader battle between decentralized finance and established banking infrastructure. The Senate's response could significantly impact Bitcoin, Ethereum, and the entire cryptocurrency ecosystem, potentially determining whether digital assets maintain their competitive edge over conventional banking products in the evolving financial landscape.