Representative Bryan Steil indicated a willingness to reconcile differences between the STABLE Act and the GENIUS Act to advance stablecoin regulations.

He highlighted the potential for stablecoins to democratize financial access for billions of underbanked individuals globally, allowing them to utilize U.S. dollar stability without excessive fees.

Currently, U.S. laws and security regulations prevent stablecoin issuers from providing interest to users, limiting the benefits that consumers could receive.

Proposed changes to allow interest on stablecoins could strengthen the U.S. economy by increasing demand for the dollar and enhancing savings, consumption, and investment activities.

Armstrong argues that allowing onchain interest would enable holders of fiat-backed stablecoins to receive a share of the yield from underlying reserve assets like U.S. Treasuries, potentially offering yields around 4%.

Recently, President Donald Trump has also called for Congress to establish regulations for stablecoins, emphasizing their potential to bolster the U.S. dollar's global standing.

Armstrong warned that regulatory inaction could cause the U.S. to miss out on significant global financial flows, urging Congress to act quickly to implement clear regulations for stablecoin interest.

Coinbase CEO Brian Armstrong is advocating for changes in U.S. law that would allow stablecoin holders to earn interest, akin to traditional bank accounts.

He believes that interest-bearing stablecoins could significantly benefit individuals in developing nations who lack access to traditional banking services, providing them with safe storage and interest-earning opportunities.

With the average Federal Funds rate at 4.75% in 2024, most consumers are receiving less than 0.5% interest on savings, resulting in a real loss of purchasing power due to inflation.

Armstrong emphasized that this model could stimulate the U.S. economy by increasing the global use of U.S. dollar stablecoins, thus boosting demand for U.S. Treasuries.

The GENIUS Act, which recently passed the Senate Banking Committee, has been amended to exclude interest-bearing instruments from its definition of payment stablecoins.