Armstrong Calls for Policy Change
Coinbase CEO Brian Armstrong is calling for U.S. regulators to allow consumers to earn interest on stablecoins. In an X post, he argued that allowing “onchain interest” would be a significant benefit to American consumers, foster global financial inclusion, and assist ongoing U.S. economic leadership in digital finance.
Stablecoins and Unlocked Yield
Armstrong explained that stablecoins are normally backed 1:1 by United States dollars and held in low-risk assets like Treasuries. The interest on the reserves typically accrues to issuers rather than being returned to users. Instead, he proposes a model where consumers earn interest directly, similar to an interest-bearing checking account.
Consumer and Global Benefits
“U.S. consumers win,” Armstrong said. He noted that despite high market rates, most Americans earn little interest on savings, leading to real losses in purchasing power. Meanwhile, billions globally lack access to banking services and could benefit from earning interest on digital dollars.
Strengthening the Dollar
Armstrong also highlighted stablecoins’ role in aiding U.S. dollar dominance, given their significant Treasury holdings. He argued that by allowing interest, the U.S. could further its monetary leadership while fostering innovation onshore.
A Call to Lawmakers
Current legislation bars stablecoins from earning interest in the same manner as banks. Armstrong called on lawmakers to bring the legal code up to date in forthcoming legislation, stating, “The tech is all there, but the law hasn’t caught up.” He advocated for a free-market ideology with a focus on consumer benefit and global financial inclusion.
