1 April 2025
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Coinbase CEO Advocates for On-Chain Interest in Stablecoin Legislation
Brian Armstrong, CEO of Coinbase, emphasized the need for updated US legislation to enable stablecoin holders to earn “on-chain interest.” He advocates for a free market approach where banks would treat crypto companies similarly to traditional banks and share interest with consumers.
- Current legislation includes two federal bills: the STABLE Act and the GENIUS Act, neither of which allows on-chain interest-generating stablecoins.
- Armstrong believes new laws could create a level playing field for regulated stablecoins, allowing them to offer interest like savings accounts.
- He estimates that legislative changes could enable US consumers to earn about 4% yield on stablecoin holdings, compared to an average savings account rate of 0.41% for 2024.
- On-chain interest could enhance the usage of USD-pegged stablecoins, bolstering the dollar’s global dominance.
- Higher yields would increase consumer earnings, promoting spending, saving, and investing, thus driving economic growth.
- Armstrong warns that failing to implement on-chain interest risks missing out on significant user adoption and cash flows.
Future developments may depend on potential legislative actions by the current administration, which has shown interest in stablecoins.