Coinbase CEO Brian Armstrong has spoken about the need to change US legislation to allow users to earn interest on stablecoins rather than relying solely on traditional banks.
Armstrong's View on Stablecoins
Brian Armstrong, CEO of the leading cryptocurrency exchange Coinbase, stated that US legislation should allow users to earn interest on stablecoins rather than introducing laws favoring traditional banks. He mentioned that both stablecoins and banks should coexist and offer interest to users, consistent with a free-market approach.
Impact of Legislative Changes
The criticism from Coinbase's CEO arose following US lawmakers' plans to introduce new legislation for stablecoins, which might force stablecoin issuers to become entities under the Bank Secrecy Act (BSA) and possibly lead them to become more law-abiding rather than crypto-friendly.
Economic Benefits of Stablecoins
Armstrong noted that stablecoins have already found market fit by digitizing the dollar and other fiat currencies, but they haven't yet unlocked their full potential to benefit the average person and the US economy through interest payments. The average FED funds rate was 4.75% in 2024, while average consumer saving account yield was 0.41%. With ~3% inflation last year, consumers lost 2.5% in purchasing power. Meanwhile, holding stablecoins could yield 4% instead of 0.1% in savings accounts. 'We can level the playing field and ensure new laws allow all regulated stablecoins to deliver interest directly to consumers,' he added.
Armstrong believes the new stablecoin legislative initiatives should focus on creating an environment where all market participants can thrive, allowing users to earn interest and maintaining the US's competitive edge in the crypto sector.
