Coinbase CEO Brian Armstrong has called on U.S. lawmakers to ensure that stablecoin legislation allows consumers to earn interest, arguing that U.S. policy shouldn’t protect banks at the expense of innovation or the public.

Armstrong said pending legislation should let crypto firms offer “onchain interest” to stablecoin holders, a feature that would allow digital dollars to function like interest-bearing checking accounts, according to a post on X on March 31.

“The government shouldn’t put its thumb on the scale to benefit one industry over another,” Armstrong wrote. “Banks and crypto companies alike should be allowed to, and incentivized to, share interest with consumers. This is consistent with a free market approach.”

Stablecoins like USDC are pegged 1:1 to the U.S. dollar and typically backed by reserve assets such as short-term Treasuries.

Right now, the yield from those assets is largely pocketed by issuers. Armstrong argued it's time to pass that yield on to users, though, as Coinbase stands to benefit from wider crypto adoption, his position isn’t entirely altruistic.

Armstrong’s comments come as lawmakers hash out details of two stablecoin bills: the House’s STABLE Act and the Senate’s GENIUS Act.

The legislation is already getting caught in the crossfire of a debate over compliance with the Bank Secrecy Act (BSA), a cornerstone of U.S. anti-money laundering law.

House Majority Whip Tom Emmer (R-MN) said stablecoin issuers shouldn’t be forced into the BSA’s regulatory framework.

Both the GENIUS and STABLE Acts currently treat all stablecoin issuers as financial institutions under the BSA, a move that could also favor U.S.-based firms while sidelining global competitors.

The BSA, enacted in 1970, requires extensive recordkeeping and customer verification from U.S. financial institutions.

Criticism has also come from other avenues. Senator Elizabeth Warren (D-MA) accused President Donald Trump of using the legislation to enrich himself, pointing to his new DeFi venture, World Liberty Financial, which just launched a stablecoin, USD1.

“Trump is using stablecoin legislation as a grift,” Warren posted, linking the rollout to what she sees as another personal money grab.

Edited by Sebastian Sinclair