Coinbase CEO Slams Legislative Push Against Interest Payments To Stablecoin Holders

• Coinbase CEO Brian Armstrong argues that opposing interest-yielding stablecoins hurts consumers and the U.S.
• Armstrong’s argument appears to be a response to recent statements from Sen. Kirsten Gillibrand (D-NY).
• The Coinbase chief is not the only expert who believes interest-yielding stablecoins should not be blocked.

Amid President Donald Trump’s backing, the crypto industry looks set to receive long-clamored-for regulations, starting with stablecoins.

As negotiations on likely bills progress in Congress, Coinbase Global COIN CEO Brian Armstrong has urged lawmakers not to prevent users from earning interest on their stablecoin holdings.

“A Win-Win”

Dollar stablecoins typically maintain their peg by holding reserves in highly liquid and safe investments like short-term U.S. Treasury bonds. In the status quo, however, issuers pocket the yield on these investments, as stablecoins do not benefit from the same exemptions under securities law that allow savings or interest-bearing checking accounts to pay out interest.

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As the U.S. works towards stablecoin rules, Armstrong warned in an X post on Monday against efforts to protect the legacy banking system by preventing stablecoins from paying out interest like a regular savings or interest-bearing checking account. According to Armstrong, such efforts would only hurt consumers and the U.S.

While Armstrong did not explicitly state it, his post appears to be a response to recent statements from Sen. Kirsten Gillibrand (D-NY). Speaking at the 2025 DC Blockchain Summit on March 26, Gillibrand asserted that allowing stablecoin interest payments will cripple the financial system customers relied on for business loans and mortgages by discouraging deposits to local banks.

Armstrong, however, argues that this position goes against the ideals of the free market system.

“The government shouldn’t put it’s [sic] 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,” he wrote.

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Armstrong posited that interest-bearing stablecoins would benefit customers by potentially allowing them to beat inflation. As highlighted by Armstrong, the average Federal Reserve funds rate earned by stablecoin issuers in 2024 was 4.75% as inflation hovered around 3%. In comparison, the average savings account offered customers only 0.41% interest.

According to Armstrong, the better wealth preservation potential of interest-bearing stablecoins would also benefit the U.S. economy by encouraging spending, saving, and investments.

“Unleashing onchain interest is a win-win,” he submitted.

Armstrong is not the only vocal crypto proponent who has criticized Gillibrand’s argument against interest-bearing stablecoins. Bitwise CIO Matt Hougan compared her  position to preventing websites from posting stories that a physical newspaper had not printed first to protect the newspaper industry.

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He further argued that the senator’s concern about lending for everyday Americans would still be satisfied by the free market, citing mortgage providers as one possible option.

Meanwhile, like Armstrong, Hougan argued that the current system only hurt everyday consumers.

“Wealthy individuals already have ways to opt-out of the zero-interest-cartel via money market funds and high-balance interest-bearing accounts. Wouldn’t it be nice if every American could have easy access to a way to gather interest on their money?” he quipped.

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