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Coinbase CEO Calls for Stablecoins that Pay Interest to Help Consumers and the Economy

Brian Armstrong, the CEO of Coinbase, is making the case for a change in stablecoin regulation in the U.S. He wants lawmakers to let issuers pay interest directly to holders. He says that this change could produce giant benefits for the normal, common consumer, include more people in the financial sector, and also strengthen the U.S. economy by boosting dollars’ influence in international markets.

In a recent post, Armstrong noted that while traditional banks can accept deposits that pay interest, for stablecoin issuers to do the same is blocked because of regulatory gray areas. This ban, he argues, deprives people of obtaining a fair market return, which hurts the progress of digital assets. Armstrong thinks that by allowing stablecoin issuers to pay interest directly, a free-market competitive area will be created, which will benefit everyone.

Stablecoins are already changing digital finance, providing a way to easily hold and transfer assets pegged to the values of fiat currencies like the US dollar. However, Armstrong posits that their full potential remains restricted. If regulations allowed issuers to share yields from the U.S., as a result, stablecoin holders could earn up to 4%. That’s a lot more than what savings accounts pay out today, which is close to zero or just zero.

But the benefits wouldn’t stop at individual consumers. Armstrong stressed the benefits to the U.S. economy. Stablecoin issuers are among the largest buyers of U.S industries. Letting stable coins that pay interest can enhance dollar liquidity, allowing stable coins to make an expanding impact on the dollar. Greater returns in consumers’ pockets could further stimulate spending, saving and investing, setting off further economic growth.

Armstrong suggests that the absence of a clear regulatory framework could lead to the United States losing the crypto race. Other nations with more crypto-friendly laws could potentially fill this void, attracting billions in financial flows and ingenuity. He said the legislatures should step up and initiate the right legislation to provide responsible oversight along with clear boundaries for the stablecoin issuers so that they can offer returns that are competitive in nature. They shouldn’t be triggered by any overreaching securities rules.

As Congress is working on stablecoin laws, Armstrong thinks this is important. The United States can promote financial inclusion and strengthen its economy by reforming individual state laws that prohibit interest-paying stablecoins because they will be limited and not good for the economy.

author avatar
Alex
Formally freelance blogger Alex is passionate writer with interest in Finance and Business, fascinated about crypto following news and covering stories.
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