Coinbase CEO Brian Armstrong has called on lawmakers to support stablecoin legislation that allows consumers to earn interest directly from their digital dollar holdings, framing it as a “win-win” for consumers, global financial access, and long-term US economic strength.
In a detailed post published on March 31, Armstrong argued that the next phase of stablecoin innovation must include “onchain interest” — a mechanism that would allow holders of fiat-backed stablecoins to receive a share of the yield generated by underlying reserve assets, such as short-term US Treasuries.
While banks currently offer interest-bearing accounts under long-standing regulatory exemptions, stablecoin issuers face legal uncertainty that prevents them from sharing interest with users without potentially triggering securities laws.
According to Armstrong:
“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.”
Fairer financial future
Stablecoins have achieved widespread adoption as a digital representation of fiat currencies, but Armstrong said they have yet to unlock their full potential for everyday users.
He noted that while the average Federal Funds rate in 2024 was 4.75%, most consumers earned less than 0.5% — and in many cases as little as 0.01% — on their savings accounts. That gap, coupled with inflation near 3%, resulted in a real loss of purchasing power for ordinary Americans.
Armstrong said:
“Onchain interest democratizes access to market-rate yields, giving regular people a fair shot at maintaining and growing their wealth.”
He also pointed to the transformative impact stablecoins could have globally. Billions of people in underbanked regions are currently locked out of US dollar access or are subject to volatile local currencies.
Armstrong added that by allowing interest-bearing stablecoins, the US could help onboard a new wave of global users into an instant, transparent, and accessible financial system with just an internet connection.
He wrote:
“No branch visits, no excessive overdraft or remittance fees. It’s equal financial access for everyone, powered by crypto rails.”
Strategic advantage for the US economy
Armstrong further emphasized that allowing onchain interest for stablecoins brings a host of potential benefits for US economic policy.
Stablecoin issuers already rank among the largest buyers of US Treasuries — surpassing many foreign governments — and are helping to draw more global demand back to dollar-denominated assets.
He argued that if consumers worldwide could earn interest on US stablecoins, the resulting increase in adoption would boost Treasury demand, reinforce dollar dominance, and stimulate economic activity through higher consumer spending and investment.
According to Armstrong:
“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 regulatory inaction could cause the US to miss out on trillions of dollars in global financial flows.
He urged Congress to act swiftly and ensure that new stablecoin legislation includes clear legal provisions allowing regulated issuers to deliver onchain interest without triggering complex disclosure requirements or securities classifications.
Armstrong said:
“With a pro-crypto administration and Congress actively working on stablecoin regulation, we have a unique opportunity. We can either modernize the system to benefit consumers — or protect an outdated one that enriches middlemen.”
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