Crypto Banks Go Head-to-Head: Coinbase, Stablecoins & The Great Financial Faceoff

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If you thought banking was boring, think again. Major US banks have apparently decided that dabbling in stablecoins, crypto custody, and trading is where the real excitement happens-because nothing screams thrill like digital assets. Coinbase’s own Brian Armstrong took the stage at The New York Times DealBook Summit and let slip that big banks are “running early pilots.” No specifics, because apparently, they’re shy about jumping into the way-too-open crypto pool, but he did hint that if they don’t jump on the bandwagon now, they’ll be left in the dust-probably because by then, nobody will remember their name. 🚀

Armstrong was pretty vague about which banks are involved, but he warned that if they don’t start adopting crypto, they might as well get comfortable cleaning out their desks. Meanwhile, he was sharing this pearls of wisdom during a cozy chat with BlackRock’s Larry Fink. Despite their classic differences (one’s the crypto rebel, the other’s the giant of the investment world), they surprisingly agreed Bitcoin isn’t going to zero-because who wants to be that guy? Fink even sees a “use case” for Bitcoin now, although he admits it’s still riddled with “leveraged players.” Because if there’s one thing true about Bitcoin, it’s that it’s a rollercoaster with no seat belts. 🎢

By the way, BlackRock’s iShares Bitcoin Trust (or as the cool kids call it, IBIT) launched in January 2024 and has smashed boundaries by becoming the biggest spot Bitcoin ETF-nice work if you can get it-valued over $72 billion. Plus, they’re the proud managers of the largest tokenized US Treasury product, handling around $2.3 billion. That’s a lot of zeros, and probably a lot of stress for those managing it. 💼

The real fireworks happen in the “battle between banks and Coinbase”-because of course the relationship’s been more like a soap opera lately. Back in August, the Banking Policy Institute (run by Jamie Dimon’s stunt double, JPMorgan) warned Congress that stablecoins could sabotage the banking sector. They’re worried about losing their credit mojo because, apparently, shifting money from fiat to stablecoins could make loans cost more and tighten credit like a pair of skinny jeans after Thanksgiving. Meanwhile, the banks are crying “loophole!” because the law bans stablecoins from offering yields directly, but Coinbase and friends can still do it. Sneaky, sneaky. 😏

And Moore: Coinbase’s vision is to be a “super app,” offering everything from credit cards to rewards-basically, a one-stop shop for people who want to say sayonara to traditional banks. Armstrong even called banks “outdated,” perhaps because they charge about 3% every time you use a credit card. Truly, the revolution will be monetized. 💳

Not everyone is thrilled about this new Robin Hood on steroids. The Independent Community Bankers of America threw a tantrum and asked the Office of the Comptroller of the Currency to reject Coinbase’s bid for a trust charter, claiming the crypto-custody model is still shiny and untested, like a new pair of shoes that might give you blisters. Coinbase’s legal boss Paul Grewal responded on X (formerly known as Twitter):

“It’s another case of bank lobbyists trying to dig regulatory moats to protect their own. From undoing a law to go after rewards to blocking charters, protectionism isn’t consumer protection.”

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2025-12-04 00:24