China gains major advantage if US bans interest on stablecoins, Coinbase exec warns
A Coinbase executive warned that banning interest on U.S. stablecoins could benefit China's digital yuan adoption.Summary
Faryar Shirzad, Coinbase's chief policy officer, cautioned that U.S. lawmakers risk giving global rivals a strategic advantage if they restrict yield on U.S.-issued stablecoins, especially following China's announcement that banks can pay interest on the digital yuan (e-CNY).
Shirzad argued that the GENIUS Act, which generally bans interest on stablecoins to keep them payment-focused, must protect the primacy of the U.S. dollar. He fears that restricting rewards on U.S. stablecoins will give non-U.S. stablecoins and Central Bank Digital Currencies (CBDCs) a competitive edge.
This debate comes as China's central bank plans to allow commercial banks to pay interest on digital yuan holdings starting January 1, 2026, shifting the e-CNY from digital cash to "digital deposit currency" to boost adoption. Crypto firms support loosening the ban, while banking groups advocate for strict enforcement of the prohibition.
(Source：The Block)