Forget your grandpa’s savings account; Coinbase CEO Brian Armstrong is pitching stablecoin interest as the financial “win-win” Uncle Sam desperately needs. Armstrong argues that letting stablecoins offer interest isn’t just good for crypto enthusiasts—it’s a patriotic play that could boost the U.S. economy.
In a March 31st post on X, Armstrong directly addressed critics, particularly those concerned about stablecoins challenging traditional banks. He declared that “onchain interest rate is a win-win” for the U.S., global stablecoin users, and even the U.S. government itself through increased demand for Treasury bills. Armstrong specifically referenced the GENIUS and STABLE Acts currently under legislative discussion.
Armstrong’s comments followed remarks from Senator Kirsten Gillibrand, a co-sponsor of the GENIUS Act. At a recent D.C. Blockchain Summit, Gillibrand voiced concerns that allowing stablecoin issuers to offer interest could undermine traditional banking. Her point? If stablecoins become more attractive than bank accounts, who will be left to fund mortgages and other essential lending activities?
However, Armstrong fired back at this line of reasoning, accusing banks of hoarding interest rate profits instead of sharing them fairly with consumers. He highlighted the stark contrast between the average Federal Funds rate of 4.75% in 2024 and the paltry 0.41% (or even 0.01%) average yield on consumer savings accounts during the same period. Armstrong argues that with inflation hovering around 3% last year, consumers effectively experienced a 2.5% loss in purchasing power due to these meager returns.
In contrast, Armstrong suggests stablecoins could offer consumers a much more appealing +4% direct interest, cutting out the traditional financial middlemen and potentially delivering a better deal for the average saver. Whether this argument sways lawmakers remains to be seen, but Armstrong is clearly betting that stablecoin interest can be framed as an American financial success story.