Coinbase vs. Wall Street: Who Gets to Write the Next Rules of America’s Financial System?
Coinbase vs. Wall Street: Who Gets to Write the Next Rules of America’s Financial System?
When crypto stayed in the lane of trading, NFTs, and “number go up,” the clash with traditional finance could be framed as an ideological debate: decentralization vs. gatekeepers, open networks vs. closed rails.
But the moment crypto seriously touches bank deposits and payments—the core profit engine of the U.S. financial system—the conflict stops being philosophical. It becomes economic.
That is why Coinbase CEO Brian Armstrong has increasingly been portrayed as a direct threat to incumbents. In The Wall Street Journal feature, he’s described as “Enemy No. 1 on Wall Street”—a signal that the industry’s center of gravity has shifted from “Should crypto exist?” to “Who controls the consumer money layer?” (The Wall Street Journal)
This article unpacks what’s really at stake, how stablecoins and onchain payments changed the battlefield, and what crypto users should do as Washington and Wall Street race to define the next financial architecture.
1) The Real Battlefield: Deposits, Payments, and the “Money Interface”
For decades, U.S. banks built defensible moats around two things:
- Deposits (cheap funding)
- Payments (sticky customer relationships)
Crypto is now threatening both via stablecoins—especially when stablecoins start behaving like a better checking account:
- 24/7 transferability
- Near-instant settlement
- Global reach
- Programmability (composability with DeFi)
- Potentially yield or rewards
This is not abstract. Coinbase publicly markets USDC rewards as a consumer feature, currently framed as “Earn unlimited 3.50% rewards on USDC” for eligible members. (Coinbase)
From a bank’s perspective, that looks uncomfortably close to deposit competition—without the same balance-sheet constraints, regulatory capital treatment, or branch overhead.
So when the “crypto app” becomes a payments and savings interface, Wall Street’s response is predictable: it will fight for rulemaking that preserves the deposit moat.
2) Coinbase’s Strategy: Regulated Onramps + Onchain Rails
Coinbase’s posture has evolved in three distinct phases:
Phase A: Survive regulation-by-enforcement
A major turning point came when the SEC dismissed its civil enforcement action against Coinbase in early 2025. (SEC press release)
That dismissal didn’t declare Coinbase “right,” but it signaled a changing posture: less courtroom regulation, more policy and frameworks.
Phase B: Shape the new framework
The SEC also launched a dedicated Crypto Task Force in January 2025, explicitly aiming to develop clearer rules beyond enforcement. (SEC press release)
Whether you see Coinbase as champion or self-interested lobbyist, the reality is simple: if crypto becomes a mainstream financial layer, the largest U.S. exchange will be in the room where the lines get drawn.
Phase C: Build payments that don’t feel like “crypto”
The fastest way to make stablecoins unavoidable is to embed them into normal commerce.
Coinbase’s partnership to bring USDC payments on Base into Shopify storefronts is a clean example: merchants can accept a “digital dollar” without redesigning their entire business workflow. (Coinbase announcement)
This is why the Coinbase vs. Wall Street narrative matters: it’s not only a regulatory fight—it’s a product distribution fight over who owns the consumer relationship in a stablecoin-first world.
3) Washington Drew a Line: The GENIUS Act Made Stablecoins “Officially Real”
In 2025, stablecoins crossed a major U.S. policy milestone: President Trump signed the GENIUS Act into law on July 18, 2025, creating a federal regulatory framework for payment stablecoins. (The White House, Fact Sheet)
For crypto users, the key takeaway is not the politics. It’s the direction:
- Stablecoins are no longer treated as a niche experiment.
- The U.S. is explicitly regulating them as a strategic financial primitive.
To understand what the law is aiming to do (and how it may shape products), the Congressional Research Service overview is one of the most useful neutral summaries, covering reserves, issuer requirements, custody rules, and bankruptcy protections. (Congress.gov / CRS overview)
Why this matters for the Coinbase vs. banks fight
Once stablecoins are regulated and normalized, the next question is: who gets to distribute them, and under what limitations?
That’s where the conflict over “stablecoin rewards,” consumer-facing yield, and what counts as “deposit-like” behavior becomes explosive—because it directly determines whether banks keep their funding edge.
4) Wall Street Isn’t Just Resisting—It’s Also Adopting
It would be a mistake to frame this as “banks hate crypto, crypto wins anyway.”
The more accurate framing is:
- Banks and market infrastructure want blockchain benefits
- They don’t want to lose control of distribution and deposits
Two recent signals make this clear.
Signal A: Stablecoins entering mainstream settlement
In December 2025, Visa announced USDC settlement in the United States, enabling certain U.S. issuer and acquirer partners to settle with Visa in USDC, with the consumer experience unchanged. (Visa press release)
Translation: even legacy giants are moving toward stablecoin rails when it improves settlement speed and operational resilience.
Signal B: Tokenization of real-world securities is moving into regulated infrastructure
DTCC announced in December 2025 that its subsidiary DTC received an SEC No-Action Letter to offer a tokenization service for select DTC-custodied assets in a controlled environment, with rollout anticipated in the second half of 2026. (DTCC press release)
This is not “DeFi replacing TradFi.” It’s TradFi absorbing onchain mechanics—under TradFi governance.
A sober reminder from policymakers
At the same time, global institutions like the BIS have warned that stablecoins, without strong regulation, can fall short as the foundation of a monetary system—especially around integrity and sovereignty. (BIS press release)
So Wall Street’s endgame is not necessarily “stop stablecoins.” It’s “shape stablecoins so they fit inside existing power structures.”
5) So Who Decides the Next Step: Coinbase, Wall Street, or Regulators?
In reality, three forces co-author the next chapter:
1) Regulators (and how they coordinate)
A persistent pain point has been jurisdictional ambiguity: what is a security, what is a commodity, and who sets the compliance path?
In January 2026, the SEC and CFTC scheduled a joint public event focused on “harmonization” and U.S. leadership in crypto—an explicit acknowledgment that fragmented oversight cannot scale with the market. (SEC announcement, CFTC announcement)
2) Congress (what it chooses to restrict or allow)
Even after stablecoin legislation, the unresolved fight is the market structure layer: whether consumer crypto platforms can offer deposit-like features, how custody is handled, and which assets fall under which rulebook.
3) Users (through behavior, not debate)
The blunt truth: if users keep dollars in stablecoins for speed, global access, and better UX, the market will pressure institutions to adapt.
If users don’t trust stablecoins (or find the UX too risky), Wall Street will win by default—not by argument, but by inertia.
6) What Crypto Users Actually Care About (and Should Watch Next)
This “Coinbase vs. Wall Street” storyline matters most because it determines everyday realities:
A) Will stablecoin yields be treated like bank interest?
If lawmakers or regulators decide stablecoin rewards are effectively deposit interest, expect:
- tighter issuer and distributor requirements
- limits on marketing and payout structures
- stronger compliance obligations
B) Will stablecoins become more permissioned?
As regulation tightens, more stablecoins may ship with:
- freeze / seize capabilities under lawful orders
- stricter address screening
- tighter onboarding requirements
This can improve consumer protection, but it also changes censorship-resistance assumptions.
C) Will payments go onchain quietly?
The likely “winning” UX is not one that feels like crypto. It’s one where:
- settlement happens onchain
- the user sees a familiar checkout flow
- compliance is embedded in the stack
If you’re a user, the question becomes: what do you self-custody, what do you keep on platforms, and how do you manage operational risk?
7) The Practical Takeaway: Self-Custody Still Matters in a Regulated Stablecoin Era
As stablecoins and tokenized assets become integrated with mainstream finance, a paradox emerges:
- The rails get faster and more “onchain”
- The control points (custody, compliance gates, and distribution) may become more centralized
That’s why self-custody remains a core user right—not as a slogan, but as a risk-management tool.
A hardware wallet like OneKey helps keep private keys offline, so users can hold long-term assets with stronger custody guarantees than “account-based” access alone. In a world where payment stablecoins may increasingly resemble regulated financial products, separating spending balances (platforms, apps, onramps) from savings custody (self-controlled keys) becomes a cleaner operational model.
Conclusion: This Isn’t Crypto vs. Banks—It’s a Fight Over the Default Money Layer
The U.S. financial system is entering a redesign cycle:
- Stablecoins are being regulated and normalized
- Payment rails are moving toward onchain settlement
- Securities infrastructure is experimenting with tokenization
- Regulators are signaling deeper coordination
Coinbase is pushing to become the consumer-facing interface for that future. Wall Street is pushing to ensure the future still routes through existing moats.
The next step of American finance will be decided by whichever side can align regulation, distribution, and trust—and by whether users ultimately treat stablecoins as a speculative sidecar, or as the new default form of digital dollars.
