Concerns Over Stablecoin Regulations
In a recent statement, Brian Armstrong, CEO of Coinbase, raised concerns over the Bank of England’s impending stablecoin regulations, suggesting they could jeopardize the UK’s position as a leading global financial center. Armstrong expressed his views through a post on social media platform X, cautioning that the guidelines being developed may stifle innovation in the digital economy. He stated that the current trajectory of these regulations poses a significant risk to the UK’s competitive edge.
Advocacy for Innovation-Friendly Regulations
His commentary comes in support of a campaign led by Stand With Crypto UK, an advocacy group launched by Coinbase last year. The group is urging the British government to adopt a more innovation-friendly regulatory framework for stablecoins and cryptocurrency, aiming to gather over 80,000 signatures by its deadline on March 3.
Regulatory Landscape and Financial Implications
The turbulent landscape of stablecoin regulations in the UK was highlighted by the Bank of England’s proposal last year, which included a cap on individual stablecoin holdings at £20,000 ($26,350) and limits for businesses at £10 million ($12.7 million). Additionally, these rules require that a minimum of 40% of reserves be kept in non-interest-bearing accounts at the central bank. Critics, including various UK lawmakers, have voiced their apprehensions that such restrictions could discourage innovation and push financial operations to other jurisdictions.
Financially, Coinbase has had a remarkable surge in stablecoin revenue, reaching $1.35 billion in 2025, a significant increase from $911 million the year before. Notably, in the final quarter of that year alone, the company reported earnings of $364 million, even amid a $667 million net loss.
Legislative Developments in the U.S.
Experts from Bloomberg Intelligence suggest that these revenue figures could potentially multiply by a factor of two to seven under the newly introduced U.S. GENIUS Act. This landmark legislation not only established the first federal framework for stablecoins in the U.S. but also allows companies in the crypto sector to offer attractive yields on deposits.
However, the question arises whether Coinbase’s advocacy stems chiefly from profit motives or broader concerns regarding systemic risks. Clearpool’s COO, Steven Wu, emphasized that this discussion encompasses larger regulatory principles, specifically whether the focus should be on effective risk management instead of merely limiting growth.
Challenges and Ongoing Discussions
Additionally, the ongoing debate around yields presents challenges in the U.S. as traditional banking institutions voice concerns over competition from interest-bearing stablecoins. This has led to the inclusion of yield restrictions in the CLARITY Act, a comprehensive market structure bill that has been prioritized by the Trump administration.
The proposed legislation extends yield limitations to platforms like Coinbase, directly impacting its revenue-sharing arrangement with Circle Internet Group related to USDC reserves. In a critical move, Armstrong withdrew Coinbase’s support for the CLARITY Act shortly before a Senate Banking Committee meeting, arguing that the bill was worse than the existing regulatory conditions.
Despite these tensions, discussions continue, with White House officials recently meeting with banking representatives and the Crypto Council for Innovation to explore stablecoin yield issues, yet no consensus has been reached as of now.
