Banks Are the Enemy? Deaton Backs Armstrong’s Clash with Wall Street

• Armstrong warns banks want to ban stablecoin rewards to protect their deposit monopoly today
• Treasury warns $6.6T could shift to stablecoins if rewards remain legal under the GENIUS Act
• Deaton calls banks “enemies of the people” over bailouts and new anti-crypto lobbying efforts

Coinbase CEO Brian Armstrong stood before lawmakers on Capitol Hill and accused Wall Street banks of trying to kill stablecoin rewards. He framed the fight as a matter of consumer choice, arguing that rewards give people more freedom while banks seek to preserve their deposit monopoly.

Pro-XRP lawyer John Deaton went even further, calling the banks enemies of ordinary people. He tied their actions to a history of bailouts and misconduct, reminding the audience that the same institutions had fueled the 2008 financial crisis while households lost homes.

Related: White House Sets Crypto Law Deadline as Congress Advances GENIUS and CLARITY Acts

The Stablecoin Rewards Debate

At the heart of the debate is the GENIUS Act, which prohibits interest payments on stablecoins but leaves rewards intact. Armstrong told Senators that banks are lobbying to close that loophole because the flow of deposits into stablecoins threatens their balance sheets.

Armstrong argued that banning rewards would be nothing more than another subsidy for banks. He told lawmakers that this would strip consumers of choice while protecting incumbents who have already failed the public before. 

The focus keyword in this debate is stablecoin rewards, and Armstrong made it clear that ti is the competition to decide their future, not regulatory capture.

The Treasury’s $6.6 Trillion Warning

A Treasury Department report earlier this year highlighted the scale of disruption at stake, suggesting that as much as $6.6 trillion could migrate from banks into stablecoins if such rewards remain available.

Stablecoin Rewards as a Threat to Banks

Banks argue that losing trillions in deposits would cripple their lending power and destabilize the financial system. They frame stablecoin rewards as a threat to economic security.

Armstrong counters that this projected shift is evidence of competition doing its job, not a reason to lock consumers back into failing institutions. For him, the $6.6T figure highlights the inefficiency of banks, not the danger of stablecoins.

Deaton Calls Out the Banks

John Deaton stood in support of Armstrong in principle, but sharpened the rhetoric. He told the public that banks are the real enemies of the people. 

Deaton pointed to 2008, when families lost homes while bankers collected bonuses. He reminded listeners that many of those same institutions now present themselves as defenders of stability.

Related: Deaton Predicts Elon Musk Will Buy More Bitcoin After Spending Bill Sparks Fury

He accused lawmakers of siding with the banking lobby, citing names like Senator Ed Markey as examples of how Wall Street interests are protected over Main Street needs.