US Banning Stablecoin Yields Will Profit Different Currencies: Exec

US lawmakers deciding to restrict rewards on US-issued stablecoins would give China and others a strategic benefit, warns Coinbase’s chief coverage officer Faryar Shirzad. 

“If this subject is mishandled in Senate negotiations in the marketplace construction invoice it may hand our international rivals a giant help in giving non-US stablecoins and CBDCs a important aggressive benefit on the worst doable time,” the manager mentioned in a Dec. 30 X put up. 

China’s Central Financial institution Overhauls CBDC Technique

The warning comes as China prepares a serious overhaul of its central financial institution digital foreign money (CBDC) technique that’s geared toward boosting the adoption of the digital yuan (e-CNY).

That digital yuan has struggled to realize traction available in the market regardless of years of pilot applications and analysis. In an effort to spice up adoption of the token, the Folks’s Financial institution of China (PBOC) introduced earlier this week that it’s going to enable business banks to pay curiosity on consumer’s digital yuan holdings. That is a part of a brand new framework that’s set to take impact on Jan. 1, 2026. 

🚀 China is giving the Digital Yuan (e-CNY) a large improve for 2026!
The PBOC simply introduced that banks will quickly pay curiosity on CBDC holdings to drive mass adoption.

Key Highlights:
💰 Curiosity-Bearing: Earn curiosity in your digital yuan pockets.
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— {Dollars} with Prasad (@p3prasad) December 29, 2025

Below the brand new coverage, the e-CNY will transition from functioning as digital money to working as “digital deposit foreign money,” mentioned PBOC Deputy Governor Lu Lei. 

Debate Over Yield-Bearing Stablecoins In The US

Shirzad’s put up additionally comes after US President Donald Trump signed the GENIUS Act into regulation in July. That is the primary US stablecoin regulatory framework on the federal stage. 

Below the GENIUS Act, stablecoin issuers are prohibited from providing yields on to token holders. Nonetheless, this identical ban just isn’t prolonged to third-party service suppliers. Critics have argued that this “loophole” permits stablecoin issuers to get across the ban. 

Coinbase, for example, gives yields on the stablecoin USDC, which is issued by Circle.

That ban on stablecoin yields has been some extent of debate in 2025, particularly as regards to how strictly the ban needs to be utilized. 

On one hand, crypto companies argue that limiting rewards may weaken the competitiveness of US stablecoins towards overseas options and CBDCs. In the meantime, banking teams are urging regulators to implement a broad prohibition. 

In a Dec. 18 letter, the Blockchain Affiliation, together with greater than 125 crypto business individuals, urged Congress to reject the banking sector’s efforts to develop the GENIUS Act’s prohibition on stablecoin pursuits or yields. 

On the identical day, the American Bankers Affiliation printed a letter of its personal calling on lawmakers to strictly implement the GENIUS Act’s ban on yield-bearing stablecoins. It argued that some crypto exchanges are decoding the regulation in ways in which enable incentives just like rewards. The group warned that this might undermine conventional banking exercise. 

USD Stablecoins Dominate The Market

Whereas the talk round US stablecoin yields continues, tokens pegged to the US-dollar nonetheless account for the lion’s share of the market. 

Information from DefiLlama reveals that the stablecoin market’s capitalization stands at about $307.95 billion. 

Stablecoin market cap (Supply: DefiLlama) 

Of that quantity, non-USD stablecoins solely make up round $1.4 billion.

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