The CEO of Coinbase has urged legislators to endorse stablecoin legislation that enables consumers to earn interest directly from their digital dollar assets, highlighting it as a “win-win” for both consumers and global financial accessibility, as well as the long-term strength of the US economy.
In a comprehensive article published on March 31, the CEO contended that the next stage of stablecoin innovation needs to integrate “onchain interest”—a system that would permit holders of fiat-backed stablecoins to earn a portion of the yields produced by the reserve assets backing them, like short-term US Treasuries.
While banks currently provide interest-bearing accounts under established regulatory exemptions, stablecoin providers face legal ambiguity that hinders them from sharing interest with users, as doing so could potentially invoke securities regulations.
As stated by the CEO:
“Consumers deserve a larger share of the benefits. Introducing onchain interest will compel us to elevate our standards for the ultimate benefit of consumers, ensuring this innovation remains in the US.”
A More Equitable Financial Future
Stablecoins have gained significant traction as digital forms of fiat currencies, yet the CEO emphasized that they have not yet realized their complete potential for everyday users.
He pointed out that although the average Federal Funds rate in 2024 stood at 4.75%, the majority of consumers earned less than 0.5% on their savings — with some receiving as little as 0.01%. This disparity, combined with inflation hovering around 3%, has resulted in a tangible erosion of purchasing power for the average American.
The CEO commented:
“Onchain interest levels the playing field, giving everyday individuals a fair chance to preserve and grow their wealth.”
He also noted the transformative potential stablecoins could present globally, as billions in underbanked regions are presently excluded from access to US dollars or are subjected to unstable local currencies.
The CEO added that by facilitating interest-earning stablecoins, the US could usher in a new wave of global users into a fast, transparent, and accessible financial system available to anyone with an internet connection.
He remarked:
“No need for branch visits, no burdensome overdraft or remittance fees. Financial access for all, powered by crypto infrastructure.”
Competitive Edge for the US Economy
The CEO further stressed that allowing onchain interest for stablecoins comes with numerous potential advantages for US economic policy.
Stablecoin issuers are already among the top purchasers of US Treasuries — outpacing numerous foreign governments — and are contributing to increased global demand for dollar-denominated assets.
He argued that if consumers globally could earn interest on US stablecoins, the increase in adoption would boost demand for Treasuries, enhance the dollar’s dominance, and invigorate economic activity through rising consumer spending and investment.
According to him:
“More yields in the hands of consumers translates to increased spending, saving, and investing—driving economic growth in every local economy where stablecoins are used.”
However, he cautioned that a lack of regulatory action could result in the US missing out on trillions of dollars in global financial flows.
The CEO implored Congress to act swiftly and ensure that new stablecoin legislation incorporates clear legal guidelines that enable regulated issuers to offer onchain interest without triggering intricate disclosure requirements or concerns around securities classification.
He concluded:
“With a crypto-friendly administration and Congress actively considering stablecoin regulation, we have a rare opportunity. We can either modernize the system for the benefit of consumers or preserve an outdated framework that benefits intermediaries.”