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Coinbase CEO Brian Armstrong is calling for a major change in U.S. stablecoin regulations: users should be able to earn interest on their stablecoins.
In a series of tweets, Armstrong argued that the government should not favor traditional banks over crypto firms. Instead, the Coinbase CEO proposed that both should be allowed, and even encouraged, to share interest with users.
— Brian Armstrong (@brian_armstrong) March 31, 2025
Stablecoins are one of the most popular crypto assets. Pegged to the dollar, stablecoins make transactions more efficient and faster. Despite their popularity, Armstrong believes on-chain interest is a missing element.
He wrote, “Onchain interest’ is the ability of a stablecoin to function as a form of payment and directly deliver interest earned on reserve assets to the stablecoin holder, effectively an interest-bearing checking account.”
Currently, stablecoin issuers hold reserves in low-risk investments like U.S. Treasuries, earning interest on these assets. However, this interest is usually kept by the issuer instead of being passed on to stablecoin holders.
Stablecoin issuers in the U.S. face hurdles paying interest to users due to:
– Regulatory clarity: Current frameworks are evolving, needing stability.
– Consumer protection: Ensuring users know the risks.
– Combating illicit activities: Preventing misuse.Interest payments…
— Alva (@AlvaApp) April 1, 2025
Armstrong believes allowing stablecoins to distribute interest would create a fairer financial system. He pointed out that while the Fed’s average interest rate in 2024 was 4.75%, traditional savings accounts offered as little as 0.01% interest.
This gap means that consumers are losing purchasing power to inflation, while middlemen take the profits. On-chain interest could solve this by giving users direct access to higher returns without needing a traditional bank.
The Global Impact
Beyond the U.S., Armstrong highlighted how this could profit billions of people, especially people in underbanked regions who lack access to stable currencies or interest-bearing accounts. Interest-earning stablecoins could provide them with a secure way to save and grow wealth, requiring only an internet connection.
This is a game changer for consumers, the economy, and global access to fair financial opportunities.
Builders will lead the way in leveling the playing field
— The Garden
(@taikaigarden) March 31, 2025
A Boost for the U.S. Economy
Stablecoin is already a big deal in the U.S. Armstrong sees this as a chance for the U.S. to strengthen its dollar dominance.
Tomorrow’s House Financial Services Committee market up the STABLES Act is another historic moment for crypto. The bill reflects years of hard work to build a bipartisan consensus, and we urge members to vote yes. Along with Senate Banking’s passage of the bipartisan GENIUS Act,… pic.twitter.com/R6dZpVMV9Z
— Brian Armstrong (@brian_armstrong) April 1, 2025
More yield in consumers’ hands means more spending and investing, boosting the economy. However, the Coinbase CEO believes current policy can not help with the needed changes.
He concluded, “We have a huge opportunity in front of us right now with a pro-crypto administration and congress actively working on new stablecoin legislation. We can choose to level the playing field and ensure these laws pave a way for all regulated stablecoins to deliver interest directly to consumers, the same way a savings or checking account can.”
Disclaimer
The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment, and informational purposes only. Any information or strategies are thoughts and opinions relevant to the accepted levels of risk tolerance of the writer/reviewers, and their risk tolerance may be different from yours. We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments, so please do your due diligence. Copyright Altcoin Buzz Pte Ltd.
The post Coinbase CEO Pushes for Interest on Stablecoins appeared first on Altcoin Buzz.
