Amrith Ramkumar

But the fight that's taking place now is interesting because it's over these rewards or annual payments Coinbase pays holders of a stablecoin offered by Circle through this very unique partnership.

So a stablecoin is a dollar-backed cryptocurrency essentially designed to hold its value.

Coinbase has this weird setup where they're allowed to pay holders on its platform of the Circle stablecoin rewards of, let's say, 3.5%.

at an annual rate.

And so banks are now looking at this and saying, wait a minute, that looks a lot like what I would pay a holder in a checking account.

I would pay them less than 0.1%.

But now you're offering these people 3.5% to just hold their cash there, essentially.

So that's created this fight that's really erupted in the last month or so in Washington.

So in mid-January, there was supposed to be a markup, a committee vote by the Senate Banking Committee on this market structure bill.

This bill has been in the works for years, but they could not agree on several key things.

Probably most importantly, this banking versus crypto fight over whether Coinbase and crypto exchanges can pay holders of stablecoins rewards.

And so the day before the markup, Brian Armstrong had a bunch of meetings with senators and he did not like the bill text.

So Armstrong puts out on social media on X, he says, Coinbase can't support this bill because of these reasons.

So the committee then cancels the vote several hours later.

And it's not really clear what the path is to get back on track.

Armstrong blowing up the vote like that was seen as really a shot across the bow at the banking industry and even some people in the White House.

So then the following week, Armstrong flies to Davos to try to make peace.

But at one point, he's talking to former UK Prime Minister Tony Blair.

And then Jamie Dimon of JPMorgan Chase comes up and interrupts.

and gets pretty heated and tells Armstrong he's full of shit.