Coinbase CEO Urges to Update Stablecoin Laws to Allow On-chain Interest

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Coinbase CEO Brian Armstrong has advocated for legislation that would allow stablecoin holders to earn interest on their digital currency.

In a recent post on X, Armstrong emphasized that enabling on-chain interest for stablecoins could significantly boost their adoption.

Currently, issuers of dollar-pegged stablecoins like USDT and USDC receive all the interest from reserve assets backing the stablecoin. Armstrong proposes that holders should also benefit through on-chain interest.

He explained that “onchain interest allows a stablecoin to function both as a payment method and an interest-bearing account by directly delivering interest from reserve assets to the holder.”

Armstrong noted that while the technology exists to implement this for current stablecoins, legal barriers prevent issuers from doing so.