Coinbase Sounds Alarm: US Stablecoin Ban May Let China Take Lead
4.7 Stablecoins Coinbase warns that U.S. stablecoin interest bans could weaken American digital currency competitiveness, especially as China advances its digital yuan with interest-bearing features, intensifying global financial rivalry.
Coinbase has raised concerns that U.S. restrictions on stablecoin interest payments could undermine the country's position in the global digital currency race, especially as China moves to allow commercial banks to pay interest on digital yuan holdings starting in 2026. The GENIUS Act, which prohibits U.S. dollar stablecoin issuers from offering interest or yield, is at the center of a heated debate. Proponents argue that allowing interest could foster innovation and strengthen U.S. stablecoins, while opponents cite regulatory and consumer protection concerns. Coinbase warns that such restrictions could make U.S.-issued stablecoins less attractive globally, potentially giving China and other competitors an edge in digital finance. The issue has become more urgent following China's policy shift, which could transform the digital yuan into a more competitive digital deposit currency. The outcome of this debate is seen as critical for the future of U.S. financial innovation and leadership in the evolving digital currency landscape.
