Thomas Daniels
Coinbase CEO Brian Armstrong has publicly urged U.S. politicians to approve interest-bearing stablecoin products, claiming that doing so would greatly benefit domestic consumers, strengthen the value of the US dollar internationally, and promote more financial inclusion.
Stablecoins, which are usually backed 1:1 by the US dollar and invested in low-risk assets like Treasury securities, provide yield from their underlying reserves, Armstrong said in a recent post on X. Nevertheless, issuers now keep these profits instead than giving them to end users.
Armstrong said that “onchain interest” might function as a contemporary counterpart of an interest-bearing checking account, giving customers direct access to returns that are in line with the benchmark interest rate set by the Federal Reserve. “U.S. consumers win,” said Armstrong. “They will benefit the most from onchain interest, because they’re getting hurt the most without it.”
He emphasized that many American savers continue to receive insignificant returns on traditional bank accounts, which gradually reduces their purchasing power even in the face of high market rates. On the other hand, granting interest to stablecoin investors might result in a more efficient and just financial system.
Noting that billions of people are still underbanked, Armstrong also emphasized the worldwide ramifications of stablecoin legislation. The United States may expand the scope of its financial system while preserving dollar dominance by using blockchain technology to make interest-bearing assets denominated in U.S. dollars easier to access. He underlined the macroeconomic importance of stablecoins by pointing out that they are among the biggest holders of US Treasuries.
However, stablecoin platforms are now unable to provide interest in a way that is comparable to that of regular banking institutions due to regulatory restrictions. Armstrong, who supports a free-market strategy that fosters innovation while safeguarding consumers, urged lawmakers to give this issue top priority in the next stablecoin legislation.
Armstrong came to the conclusion that “the technology exists.” “The regulatory clarity to make it a reality is the only thing lacking.”
