Coinbase CEO Pushes for Stablecoin Interest—Big Changes Ahead?

Coinbase CEO Brian Armstrong is pushing for regulatory changes that would allow stablecoin holders to earn interest on their assets. According to his opinion, this transformation would create superior economic possibilities for users while enhancing the global standing of the American dollar. 

However, laws currently bar stablecoin issuers from paying interest to their holders, and upcoming legislative activities fail to introduce any changes.

https://t.co/Y7JDtkRK1R

— Brian Armstrong (@brian_armstrong) March 31, 2025

Armstrong Calls for Stablecoin Interest Payments

Brian Armstrong has urged U.S. lawmakers to revise regulations so stablecoin issuers can provide interest to users. In a March 31 post on X, he stated that stablecoin companies should have the ability to pass interest earnings to holders, just as banks do with savings accounts.

“There’s no reason why people shouldn’t be able to earn interest on stablecoins, especially when these assets are backed by government bonds or other interest-generating reserves,” Armstrong said.

He estimates that allowing onchain interest could give stablecoin holders an annual yield of around 4%, which is much higher than the 0.41% average interest rate currently offered on savings accounts. He also emphasized that this would make stablecoins more appealing and encourage greater use. “This could give people a better way to save and grow their money, all while keeping the dollar competitive in the digital space,” he added.

Current Laws Prevent Interest on Stablecoins

Two federal bills are currently being discussed in Congress to establish clear regulations for stablecoins: the STABLE Act and the GENIUS Act. However, neither of these bills permits stablecoin issuers to pay interest to holders. The STABLE Act explicitly states that issuers of “payment stablecoins” cannot offer yield to users.

The GENIUS Act, which recently passed the Senate Banking Committee with an 18-6 vote, also does not include provisions for interest-bearing stablecoins. Lawmakers have been refining the bill’s language, and Representative Bryan Steil noted that there is an effort to align the House and Senate versions. 

“We are working to make sure both chambers agree on a final version that provides a clear regulatory path forward,” Steil said.

Economic Benefits of Allowing Stablecoin Interest

Armstrong suggests that allowing interest on stablecoins would benefit the economy. He thinks that permitting individuals to gain a better return on digital dollars would promote increased saving and investment. “If stablecoins were able to provide actual returns, we would observe a greater number of individuals retaining them and utilizing them for daily purchases,” he elaborated.

He additionally noted that a robust demand for stablecoins backed by the U.S. dollar might strengthen the dollar’s position in the worldwide financial system. Armstrong stated, “As more individuals globally opt to hold value in dollar-pegged stablecoins, the greater the influence the U.S. maintains in a progressively digital economy.” He cautioned that if the U.S. fails to revise its regulations, other nations might assume the lead. “If we fail to adjust, we jeopardize billions in capital moving to markets that welcome this type of innovation.”

What’s Next for Stablecoin Regulations?

Lawmakers currently work to establish stablecoin legislation which politicians can support widely. The industry leaders led by Armstrong support interest-bearing stablecoins but these versions of the STABLE Act and GENIUS Act presently do not grant that permission.

For now, stablecoin holders will have to wait to see if regulations evolve. Armstrong’s push for change could influence future amendments, but no immediate adjustments have been proposed.