Coinbase CEO Brian Armstrong is advocating for U.S. regulations to permit consumers to earn interest on stablecoins.
Through a post on X, Armstrong stated that allowing stablecoin interest would be beneficial to customers, would broaden access to financial services around the world, and would help the economy of the United States.
The individual went on to clarify that stablecoins are often stored in low-risk assets such as U.S. Treasuries and are backed by the dollar in a ratio of one to one. It is common practice for issuers to keep the interest proceeds from these reserves rather than passing them on to the end users.
According to his argument, “onchain interest” might operate in a manner similar to that of an interest-bearing checking account, providing users with direct access to yields that are comparable to the benchmark rate established by the Federal Reserve.
Armstrong claims that, despite the high market rates, consumers in the United States are currently earning very little interest on their savings accounts, which results in a significant decrease in their ability to make purchases.
Additionally, he underlined that billions of people throughout the world are still not adequately banked and could get advantages from having access to interest-earning U.S. dollars through stablecoins.
In addition to this, he mentioned that stablecoins are among the largest holders of United States Treasuries, which significantly strengthens the supremacy of the dollar. According to Armstrong, legislative constraints prevent stablecoins from offering interest in the same way that banks do.
Additionally, he said that a free-market approach would be beneficial to consumers and would maintain innovation within the United States. He urged lawmakers to address this issue in the impending legislation regarding stablecoins.
