1-4-2025 – Coinbase’s Chief Executive, Brian Armstrong, has launched an impassioned campaign for revolutionary changes to American stablecoin legislation, advocating for holders to receive “onchain interest” comparable to traditional banking yields.
Taking to social media platform X on 31 March, Armstrong articulated a vision where digital currency platforms could mirror conventional banking institutions, emphasising the need for market-driven interest distribution to consumers. His proposition arrives amidst heightened legislative activity surrounding stablecoin regulation in Washington.
The potential economic implications are striking, with Armstrong suggesting holders could secure yields approaching 4% – a remarkable contrast to the current savings account average of 0.41%. This disparity underscores the transformative potential of his proposal.
Two pivotal pieces of legislation currently navigate the corridors of Congress: the STABLE Act and the GENIUS Act. However, both proposals explicitly exclude provisions for interest-bearing stablecoins, with the STABLE Act specifically prohibiting yield payments to holders.
Despite these legislative hurdles, there appears to be growing alignment between House and Senate approaches. Representative Bryan Steil, speaking to Eleanor Terrett on the Crypto in America podcast, indicated that the remaining differences between the two bills are largely textual rather than fundamental.
Armstrong’s economic reasoning extends beyond individual benefits, suggesting that enabling interest payments could significantly bolster American financial dominance. He contends this approach would attract global capital back to US Treasuries whilst reinforcing dollar supremacy in an increasingly digital global economy.
The Coinbase chief executive warns of potentially missed opportunities, suggesting that failure to embrace onchain interest could result in the US forfeiting substantial economic advantages, including “billions more USD users and trillions in potential cash flows”.
This legislative development occurs against the backdrop of stablecoins’ established success in digitalising traditional currencies. Armstrong argues that adding interest-bearing capabilities would complete their evolution into fully-fledged digital financial instruments, potentially catalysing economic growth across regions where stablecoins maintain a presence.