tl;dr
Coinbase CEO Brian Armstrong urges U.S. lawmakers to ensure stablecoin legislation permits consumers to earn interest. He argues that policy should not favor banks over innovation and the public, advocating for a free market approach. Armstrong's comments come amidst the debate over two stablecoin b...
Coinbase CEO Brian Armstrong is advocating for stablecoin legislation that allows consumers to earn interest. He emphasizes a free market approach and fair competition between banks and crypto firms. Pending stablecoin bills, such as the STABLE Act and GENIUS Act, are entangled in debates over compliance with the Bank Secrecy Act (BSA) and the potential to favor U.S.-based firms over global competitors.
Criticism of stablecoin legislation includes concerns about President Donald Trump's involvement in a new DeFi venture, with Senator Elizabeth Warren accusing him of using the legislation for personal gain. Armstrong urges U.S. lawmakers to ensure stablecoin legislation permits consumers to earn interest. He argues that policy should not favor banks over innovation and the public, advocating for a free market approach.
Armstrong's comments come amidst the debate over two stablecoin bills, with criticism from various lawmakers and concerns about compliance with the Bank Secrecy Act. Senator Elizabeth Warren accused President Trump of using the legislation for personal gain, linking it to his new DeFi venture, World Liberty Financial.
Coinbase CEO Brian Armstrong has called on U.S. lawmakers to ensure that stablecoin legislation allows consumers to earn interest, arguing that U.S. policy shouldn’t protect banks at the expense of innovation or the public. Armstrong said pending legislation should let crypto firms offer “onchain interest” to stablecoin holders, a feature that would allow digital dollars to function like interest-bearing checking accounts, according to a post on X on March 31. “The government shouldn’t put its thumb on the scale to benefit one industry over another,” Armstrong wrote. “Banks and crypto companies alike should be allowed to, and incentivized to, share interest with consumers. This is consistent with a free market approach.”
Stablecoins like USDC are pegged 1:1 to the U.S. dollar and typically backed by reserve assets such as short-term Treasuries. Right now, the yield from those assets is largely pocketed by issuers. Armstrong argued it's time to pass that yield on to users, though, as Coinbase stands to benefit from wider crypto adoption, his position isn’t entirely altruistic.
Armstrong’s comments come as lawmakers hash out details of two stablecoin bills: the House’s STABLE Act and the Senate’s GENIUS Act. The legislation is already getting caught in the crossfire of a debate over compliance with the Bank Secrecy Act (BSA), a cornerstone of U.S. anti-money laundering law. House Majority Whip Tom Emmer (R-MN) said stablecoin issuers shouldn’t be forced into the BSA’s regulatory framework. Both the GENIUS and STABLE Acts currently treat all stablecoin issuers as financial institutions under the BSA, a move that could also favor U.S.-based firms while sidelining global competitors.
The BSA, enacted in 1970, requires extensive recordkeeping and customer verification from U.S. financial institutions. Criticism has also come from other avenues. Senator Elizabeth Warren (D-MA) accused President Donald Trump of using the legislation to enrich himself, pointing to his new DeFi venture, World Liberty Financial, which just launched a stablecoin, USD1. “Trump is using stablecoin legislation as a grift,” Warren posted, linking the rollout to what she sees as another personal money grab.