Brian Armstrong has a message for the banking industry: your product is worse, and you know it.
The Coinbase CEO has been making the case that stablecoins offer something traditional bank accounts fundamentally cannot, a single account where users can both spend and earn yield on their holdings.
The bank lobby’s favorite boogeyman
Armstrong has described bank opposition to stablecoin rewards as a “boogeyman” issue, suggesting financial institutions are less concerned about consumer protection than they are about losing deposits.
Traditional banks operate on a fractional reserve model, meaning they take your deposits, lend most of them out, pocket the spread, and give you back a fraction of the earnings. Stablecoins flip that dynamic by offering what Armstrong calls “onchain interest,” where yields from the assets backing stablecoins, frequently US Treasuries, flow more directly to the holder.
