Cryptocurrency Executives Lobby Congress to Allow Stablecoins to Pay Interest

In early April 2025, leading cryptocurrency executives intensified their lobbying efforts, urging Congress to permit stablecoin issuers to offer interest payments to token holders. This initiative seeks to incorporate provisions into forthcoming legislation that would establish a regulatory framework for stablecoins—cryptocurrencies pegged to stable assets like the U.S. dollar. Proponents, including Coinbase CEO Brian Armstrong, argue that allowing interest on stablecoins would create a level playing field between crypto firms and traditional banks, enabling both to share interest earnings with consumers. Armstrong emphasized, "The government shouldn't put its thumb on the scale to benefit one industry over another."

However, this proposal has elicited mixed reactions from lawmakers and financial industry watchdogs. Critics express concerns that permitting interest-bearing stablecoins could incentivize consumers to transfer funds from insured bank accounts to uninsured crypto platforms, potentially destabilizing the traditional banking system. The Independent Community Bankers of America (ICBA) has voiced apprehensions regarding the adequacy of regulatory oversight for non-bank entities offering such financial products.

This development occurs amid broader discussions about the regulatory landscape for cryptocurrencies in the United States. The Trump administration has advocated for more accommodating policies toward digital assets, aiming to foster innovation while ensuring consumer protection. Nonetheless, Democratic lawmakers, including Senator Elizabeth Warren and Representative Maxine Waters, have raised concerns about potential conflicts of interest, particularly regarding President Trump's personal financial ties to the cryptocurrency industry. They have requested that the Securities and Exchange Commission (SEC) preserve records related to President Trump's crypto venture, World Liberty Financial, to investigate these potential conflicts.