- Coinbase CEO pushes for U.S. stablecoin interest to benefit consumers and boost financial inclusion.
- Regulatory delays prevent stablecoins from offering yields like traditional bank accounts, says Armstrong.
- Stablecoins hold U.S. Treasuries, reinforcing dollar dominance—interest payments could expand this role.
Coinbase CEO Brian Armstrong is advocating for updated U.S. regulations to enable people to earn interest from stablecoins. Through an X post, Brian Armstrong stressed that the current financial restrictions prevent Americans from benefiting financially, although competing markets implement better policies.
Armstrong explained that stablecoins are backed 1:1 by the U.S. dollar and typically held in low-risk assets such as U.S. Treasuries. However, instead of passing the generated interest to consumers, issuers retain it. He contends that allowing stablecoin holders to earn yields could strengthen the U.S. economy and expand financial access globally.
Stablecoin Interest Could Function Like a Bank Account
According to Armstrong, onchain interest could be a substitute for interest-bearing checking accounts, allowing consumers direct access to returns comparable to the Federal Reserve benchmark. According to him, American consumers face difficulties because traditional banks provide low interest rates while market rates remain elevated.
He added that billions of people around the world who aren’t banked would also benefit from the ability to take possession of U.S. dollars through stablecoins that earn interest. His idea was to allow a system like this, where financial inclusion could be made without relying on traditional banking infrastructure.
Additionally, Armstrong highlighted the role of stablecoins in reinforcing the global position of the U.S. dollar. Many stablecoin reserves are invested in U.S. Treasuries, making them among the largest holders of these assets. Allowing stablecoin interest, he suggested, would only enhance dollar stability and influence.
In addition, Armstrong also emphasized the contribution of stablecoins in reinforcing the U.S dollar’s position globally. Some of the largest holders of the U.S. Treasuries are many stablecoin reserves which are invested in treasuries. He suggested allowing stablecoin interest would improve the stability and influence of the U.S.
Regulatory Barriers Prevent Interest Payments on Stablecoins
Armstrong stated that the technology is available, but existing regulations do not allow stablecoins to return interest as banks do. He called on lawmakers to address this into future legislation, saying the best way would be to introduce a free market that would bring both consumers and innovation into the United States.
“So why aren’t we doing this today?” Armstrong questioned in his post. “The tech is all there, but the law hasn’t caught up.”
The regulatory landscape around stablecoins remains a contentious issue in Washington, with lawmakers debating how these digital assets should be integrated into the broader financial system. Armstrong’s comments reflect growing industry frustration with regulatory delays, as other regions, including Europe and parts of Asia, have moved forward with stablecoin frameworks that allow interest payments.
As policymakers consider updates to U.S. stablecoin regulations, Armstrong’s push underscores the broader debate over how digital financial products should be treated under the law. The discussion will likely continue as Congress weighs potential changes to the regulatory framework governing stablecoins and other digital assets.
