Coinbase CEO Brian Armstrong is advocating for U.S. regulations to permit consumers to earn interest on stablecoins. 

Armstrong argued in an X post that allowing stablecoin interest would benefit consumers, expand financial access globally, and strengthen the U.S. economy.

He explained that stablecoins are typically backed 1:1 by the dollar and held in low-risk assets like U.S. Treasuries. The interest from these reserves is usually retained by issuers rather than passed on to consumers.

Onchain interest as a ‘win’ for US consumers

He argued that “onchain interest” could function like an interest-bearing checking account, giving users direct access to yields comparable to the Federal Reserve’s benchmark rate.

“U.S. consumers win,” Armstrong stated. “They will benefit the most from onchain interest, because they’re getting hurt the most without it.”

According to Armstrong, U.S. consumers currently earn minimal interest on savings accounts despite high market rates, leading to a real loss in purchasing power. 

He also emphasized that billions globally remain underbanked and could benefit from access to interest-earning U.S. dollars via stablecoins.

Additionally, he noted that stablecoins are among the largest holders of U.S. Treasuries, reinforcing dollar dominance.

Armstrong stated that regulatory barriers prevent stablecoins from offering interest in the same way banks do. He called on lawmakers to address this in upcoming stablecoin legislation, arguing that a free-market approach would benefit consumers and keep innovation within the U.S.

“So why aren’t we doing this today?” Armstrong questioned. “The tech is all there, but the law hasn’t caught up.”