Coinbase Plans 4% BTC Rewards Card as Part of Bank-Replacement Push
Armstrong Wants Coinbase to Replace Banks
Armstrong criticized the inefficiencies of the current banking system, highlighting credit card transaction fees as an example. “It kind of boggles my mind. Like, why are we paying two to three percent every time we swipe our credit card? It’s just some bits of data flowing over the internet. It should be free or close to it.”
Investor Takeaway
Crypto Rewards and Everyday Finance
Armstrong outlined specific plans to roll out a credit card offering 4% BTC rewards, a move designed to diverseiate Coinbase from legacy banks and existing fintech challengers. “Ultimately, we want to be a bank replacement for people,” he said, framing the strategy as a push to combine traditional financial utility with crypto-native benefits.
The ambition to provide a primary financial account signals a broader market shift. For Coinbase, the goal is not only to dominate crypto trading but also to capture consumer finance, where banks and payment firms currently take billions in fees annually.
The push coincides with growing regulatory clarity in the U.S.. Armstrong praised recent developments such as the GENIUS Act and progress on broader market structure legislation, saying the “freight train has left the station” when it comes to crypto’s regulatory recognition.
Bank Partnerships and Policy Tensions
Armstrong acknowledged that Coinbase has already partnered with major banks such as JPMorgan and PNC, but suggested that institutional partners still take inconsistent approaches to crypto. “Their policy folks sometimes are doing a diverse playbook,” he said. “We’d rather that they just operated on a with every other company.”
Coinbase has also turned to decentralized finance to strengthen its product offering. The company recently integrated Morpho, a decentralized lending protocol, into its platform. The integration allows users to lend USDC directly through the app, with yields reaching as high as 10.8% — bypassing third-party DeFi interfaces.
The move has sparked debate among policymakers, as the GENIUS Act banned yield-bearing stablecoins. Banking industry groups such as the Bank Policy Institute have called for regulators to close what they view as loopholes that enable yield through DeFi integrations. Armstrong and Coinbase reject this framing, arguing that stablecoins represent a modern alternative to outdated bank revenue models rather than a systemic risk.
“Stablecoins aren’t a threat to lending,” Coinbase said in response. “They are a better model than the outdated system of fees and inefficiency.”
Investor Takeaway
What’s Next for Coinbase
The super app strategy puts Coinbase on a collision course with both and fintech giants. Its ability to execute will depend on regulatory clarity, institutional adoption, and consumer trust. Analysts suggest that if Coinbase succeeds, it could redefine retail and institutional finance in the U.S., merging banking services, crypto trading, and DeFi yields into a single ecosystem.
For investors, the trajectory is clear: Coinbase is no longer just a trading venue. Its push to replace banks with a crypto-powered financial super app marks one of the most ambitious strategies in the industry.
