In a passionate plea for innovation in the cryptocurrency space, Coinbase CEO Brian Armstrong has called on lawmakers to support stablecoin legislation that would allow consumers to earn interest directly from their digital dollar holdings.
Armstrong frames this as a “win-win” for both consumers and the broader U.S. economy, proposing that the next phase of stablecoin development should include a mechanism for onchain interest—enabling holders of fiat-backed stablecoins to receive a share of the yield generated by underlying assets such as short-term U.S. Treasuries.
Stablecoins and the Future of Financial Innovation
Armstrong emphasized that while stablecoins have already gained widespread adoption as digital representations of fiat currencies, their full potential remains untapped. He noted that banks have long been able to offer interest-bearing accounts under established regulatory exemptions, yet stablecoin issuers face significant legal uncertainty, which currently prevents them from sharing interest with users without potentially violating securities laws.
According to Armstrong, this regulatory challenge creates an opportunity to innovate further in the space:
“Consumers deserve a bigger piece of the pie. Opening the door for onchain interest will force us all to up our game for the ultimate benefit of consumers, and will keep this innovation onshore,” he wrote.
A Fairer Financial Future for All
One of Armstrong’s key points is that onchain interest could democratize access to market-rate yields, which would allow average consumers to earn a fairer return on their savings compared to traditional banking systems. He compared the disparity between the Federal Funds rate, which in 2024 was 4.75%, and the near-zero interest rates most consumers earn on their savings accounts—often as low as 0.01%.
Given the ongoing inflationary pressures (near 3%), Armstrong highlighted that this interest gap results in a real loss of purchasing power for everyday Americans. In contrast, onchain interest could help regular people maintain and grow their wealth by offering them better financial returns on their digital dollar holdings.
He stated, “Onchain interest democratizes access to market-rate yields, giving regular people a fair shot at maintaining and growing their wealth.”
Global Implications: Financial Inclusion and Global Access
Beyond U.S. borders, Armstrong also pointed to the transformative impact stablecoins could have in underbankedregions across the globe. Billions of people in countries with volatile currencies are either excluded from accessing the U.S. dollar or are subject to unstable local currencies. Stablecoins offer an alternative: a stable, dollar-backed asset that can be accessed with just an internet connection.
Armstrong explained that by allowing interest-bearing stablecoins, the U.S. could onboard a new wave of global usersinto an instant, transparent, and accessible financial system. He described how this system would eliminate the need for branch visits, excessive overdraft, and remittance fees, giving equal financial access to everyone.
Strategic Advantage for the U.S. Economy
Armstrong emphasized that legislation enabling onchain interest would provide multiple benefits for the U.S. economy. He noted that stablecoin issuers are already among the largest buyers of U.S. Treasuries, surpassing many foreign governments. This has contributed to an increasing global demand for dollar-denominated assets.
With more consumers able to earn interest on stablecoins, Armstrong believes it would result in even greater Treasury demand, reinforcing dollar dominance globally. This, in turn, could stimulate economic activity through higher consumer spending and investment.
He elaborated:
“More yield in consumers’ hands means more spending, saving, investing — fueling economic growth in all local economies where stablecoins are held.”
However, Armstrong warned that without action from Congress, the U.S. risks missing out on trillions of dollars in potential global financial flows. Regulatory inaction could cause the country to fall behind in this financial innovation race, losing out to more crypto-friendly nations.
Urgent Call for Regulatory Action
Armstrong is urging Congress to take action and ensure that new stablecoin legislation provides clear legal frameworks that would allow regulated issuers to offer onchain interest without triggering complex disclosure requirements or securities classifications. He stressed that with a pro-crypto administration and active Congressional involvement in stablecoin regulation, the U.S. has a unique opportunity to modernize the financial system for consumers.
“We can either modernize the system to benefit consumers — or protect an outdated one that enriches middlemen,” Armstrong concluded.
Looking Ahead
As stablecoins continue to gain traction as an essential tool in the financial ecosystem, Armstrong’s call for legislation to allow onchain interest could be a pivotal step toward ensuring that the U.S. remains at the forefront of digital financial innovation. With the global adoption of stablecoins growing, the move could not only empower consumers but also solidify the U.S. dollar’s role in the evolving global economy.
The next few months could prove critical as U.S. lawmakers deliberate on the future of stablecoin regulation and the potential for stablecoin interest-bearing accounts to reshape the financial landscape.
Kosta Gushterov
Reporter at Coindoo
Kosta has been a part of the team since 2021 and has solidified his position with a thirst for knowledge, incredible dedication to his work and a “detective-like” mindset. He not only covers a wide range of trending topics, he also creates reviews, PR articles and educational content. His work has also been referenced by other news outlets.
Source: https://coindoo.com/coinbase-ceo-brian-armstrong-calls-for-stablecoin-legislation/