Michaela
Republican Representative French Hill has rejected Coinbase CEO Brian Armstrong’s call for stablecoin interest, signaling that Congress is unlikely to approve legislation allowing users to earn yield on digital assets like USDC.
During an April 1 briefing, Rep. Hill weighed in on the ongoing debate over stablecoin regulations, specifically addressing the idea of allowing users to earn interest on their holdings.
Hill dismissed the proposal, emphasizing that lawmakers have not reached an agreement on the matter of.
“I hear the point of view but I don’t think that there’s consensus among the parties or the houses on having a dollar-backed payment stablecoin pay interest to the holder of that stablecoin,” Rep. Hill said.
Rep. Hill’s remarks came in response to Armstrong’s public call for Congress to eliminate the proposed ban on earning yield from stablecoins. Armstrong took to X to urge lawmakers to reconsider the restriction, arguing that it limits innovation in the crypto space.
“The government shouldn’t put it’s thumb on the scale to benefit one industry over another. Banks and crypto companies alike should both be allowed to, and incentivized to, share interest with consumers. This is consistent with a free market approach,” Armstrong wrote.
Armstrong clarified that stablecoins like USDC have digitized traditional currencies, but a key feature yet to be unlocked is stablecoin interest for users.
Currently, issuers hold reserves in low-risk investments like U.S. Treasuries and keep the interest earned. “Onchain interest” would allow stablecoin holders to receive a share of those earnings, similar to an interest-bearing account, while still using stablecoins for payments — potentially benefiting both individuals and the broader economy.
Additionally, Armstrong argued that stabelcoin interest would be a “win-win” for both consumers and the broader economy.
Armstrong claimed that U.S. consumers would benefit the most from, but billions worldwide could also gain access to interest-earning U.S. dollars — especially those in underbanked regions where local currencies are unstable. He further pointed out that stablecoins are already among the largest holders of U.S. Treasuries, suggesting that enabling stablecoin interest would further strengthen the U.S. financial system.
“We have a huge opportunity in front of us right now with a pro-crypto administration and congress actively working on new stablecoin legislation. We can choose 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,” Armstrong wrote.
Read More
- Senate Advances GENIUS Act to Regulate Stablecoins Under New Rules
- US Stablecoin Bill Likely in Two Months – Bo Hines
- Bank of America Stablecoin Set to Launch Amid Looming US Crypto Regulations
Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
