{"id":124167,"date":"2026-01-02T03:54:37","date_gmt":"2026-01-02T03:54:37","guid":{"rendered":"https:\/\/mycryptomania.com\/?p=124167"},"modified":"2026-01-02T03:54:37","modified_gmt":"2026-01-02T03:54:37","slug":"coinbase-says-stablecoin-interest-ban-gives-china-the-advantage","status":"publish","type":"post","link":"https:\/\/mycryptomania.com\/?p=124167","title":{"rendered":"Coinbase Says Stablecoin Interest Ban Gives China the Advantage"},"content":{"rendered":"

Coinbase is pushing back against efforts to limit interest on stablecoins in the United States, warning that such restrictions could end up helping China.<\/span>\u00a0The warning comes as lawmakers debate how to enforce the GENIUS Act, which became law in July and introduced<\/span> a <\/span>new <\/span>set of<\/span> rules for stablecoins.<\/span> The timing is especially important, <\/span>with<\/span> China <\/span>getting ready<\/span> to let users earn interest on its own digital currency starting early next year.<\/span><\/p>\n

How U.S. Stablecoin Interest Rules Are Taking Shape<\/span><\/h2>\n

Currently, the law prohibits stablecoin issuers in the U.S. from paying interest directly to users. However, some platforms have been offering rewards through workarounds that allow users to earn yield without violating the exact wording of the rule.\u00a0<\/span><\/p>\n\n

Banking groups are calling for regulators to shut those options <\/span>down<\/span> too, arguing that any <\/span>kind of reward<\/span> linked to stablecoins could pull money out of banks and shake up the traditional system.<\/span><\/p>\n

Crypto firms are pushing back, saying this goes further than what lawmakers originally intended and risks cutting off innovation that helps the space grow.<\/span><\/p>\n

Why Coinbase Worries About the Bigger Picture<\/span><\/h2>\n

Coinbase\u2019s policy team says that if the U.S. keeps tightening the rules around stablecoin rewards, people and businesses might just take their money elsewhere. China\u2019s central bank is preparing to offer interest on its digital yuan starting January 2026. <\/span><\/p>\n

That kind of return could make the digital yuan more attractive for both payments and long-term holding <\/span>compared to<\/span> U.S. stablecoins <\/span>that<\/span> don\u2019t offer any yield <\/span>at all<\/span>.<\/span> Coinbase believes this could weaken the appeal of dollar-backed tokens globally and make it harder for the U.S. to maintain its influence in the fast-evolving world of digital money.<\/span><\/p>\n

DISCOVER: 20+ Next Crypto to Explode in 2026<\/a><\/strong><\/p>\n

Banks Want Tight Enforcement<\/span><\/h2>\n

On the other side of the argument, major banking groups are telling regulators to crack down on any stablecoin product that even resembles a savings account. <\/span>They say interest-bearing tokens could trigger large withdrawals from traditional banks and <\/span>create<\/span> risks <\/span>for<\/span> the broader financial system.<\/span><\/p>\n

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