Coinbase CEO Brian Armstrong defended rewards paid to users holding USDC, arguing they differ from bank interest because USDC is backed one-to-one by eligible assets, including short-term U.S. Treasuries, rather than used for fractional-reserve lending. Coinbase describes its USDC Rewards program as a company-funded loyalty program, while USDC is issued by Circle. The GENIUS Act, signed into law in July 2025, requires permitted payment stablecoin issuers to maintain at least one-to-one reserves and bars issuers from paying interest or yield, but leaves unresolved how rewards offered by exchanges and other third parties should be treated. Banks argue such programs could pull deposits from community banks. A White House Council of Economic Advisers analysis estimated that banning stablecoin yield would increase bank lending by about $2.1 billion while creating an estimated annual welfare cost of $800 million, though banking groups dispute its assumptions. The Senate rejected cloture on the CLARITY Act on Sept. 15 by a 49-50 vote, leaving the rewards debate unresolved and keeping pressure on Washington, Congress, the SEC and CFTC.