Key Notes

• Armstrong argued that permitting on-chain interest for stablecoins could provide US consumers with an estimated 4% yield.
• This could enhance spending, saving, and investment, strengthening local economies.
• Armstrong believes that enabling stablecoin interest could accelerate the use of USD-backed digital assets globally.

Brian Armstrong, the CEO of crypto exchange Coinbase stated that the US legislation should upgrade while allowing stablecoin holders to earn “on-chain interest” on their holdings. He said that having such an arrangement in place would be “consistent with a free market approach”.

In a post on the X platform on Monday, March 31, Armstrong said that banks should treat crypto companies similarly to banks and be “allowed to, and incentivized to, share interest with consumers”.

https://t.co/Y7JDtkRK1R

— Brian Armstrong (@brian_armstrong) March 31, 2025

As of now, there are two federal stablecoin bills competing through the US legislative process. This includes the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act and the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act. However, neither of these two acts allow for on-chain interest-generating stablecoins to operate in the market.

While referring to the current stablecoin legislation, Armstrong noted that the United States had an opportunity to “level the playing field and ensure these laws pave a way for all regulated stablecoins to deliver interest directly to consumers, the same way a savings or checking account can”.

Coinbase CEO Explains Benefits of On-Chain Stablecoin Interest for US Economy

While speaking in favour of stablecoins, Armstrong said that this asset class has already found the product-market fit by “digitizing the dollar and other fiat currencies” Thus, he believes that allowing on-chain interest for stablecoins would allow “the average person, and the US economy, to reap the full benefits”.

He stated that if legislative changes permitted stablecoin issuers to pay interest to holders, US consumers could earn an estimated 4% yield on their holdings, significantly surpassing the 2024 average savings account interest rate of 0.41%, as cited by Armstrong.

Furthermore, the Coinbase CEO is confident that on-chain interest will benefit the overall US economy, while incentivizing the global use of USD-pegged stablecoins. Offering an on-chain interest facility could boost the use of these stablecoins, ultimately strengthening US dollar’s dominance in the global market.

He further argued that offering a higher yield than traditional savings accounts would put more earnings in consumers’ hands, leading to increased spending, saving, and investing, ultimately driving economic growth in local economies where stablecoins are held.

“If we don’t unlock onchain interest, the US misses out on billions more USD users and trillions in potential cash flows,” Armstrong added.

It will be interesting to see whether the Trump administration introduces some important legislative changes, as the US President has also shown interest in this asset class recently.

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Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.

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Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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