As the world's elites and crypto's top leaders gathered in Davos, Switzerland, for the World Economic Forum, a panel billed as a discussion on blockchain plumbing turned into a sharp-edged debate between Coinbase CEO Brian Armstrong and Bank of France Governor François Villeroy de Galhau over stablecoin yields and bitcoin.
While the panel, "Is Tokenization the Future?" was meant to focus on tokenization, most of the discussion centered on stablecoin rewards, bitcoin, and the state of U.S. Senate discussions over the CLARITY Act, which was recently delayed just a few hours after Coinbase pulled its support.
The primary flashpoint centered on stablecoins—specifically, whether fiat-pegged tokens should pay interest to holders. Armstrong framed the issue as a matter of global competitiveness and consumer rights.
“First, it puts more money in consumers’ pockets. People should be able to earn more on their money,” Armstrong argued. “Second, global competitiveness: China has said its CBDC will pay interest, and offshore stablecoins already exist. If U.S.-regulated stablecoins are banned from paying rewards, offshore competitors flourish."
Villeroy de Galhau remained unmoved, viewing interest-bearing private tokens as a systemic risk to traditional banking. He rejected the notion that a CBDC should compete on yield. When asked if a digital euro should pay interest, the Governor was blunt: “The answer is no,” he said. “The public purpose should also be to preserve the stability of the financial system.”
The panel also included Standard Chartered CEO Bill Winters, Ripple CEO Brad Garlinghouse, and Euroclear CEO Valérie Urbain, alongside moderator Karen Tso, a CNBC Squawk Box co-anchor.
Garlinghouse had a more conciliatory response to the question of yield, saying that "competition is good, and a level playing field matters," although he clarified that “Ripple doesn’t have as much of a dog in that fight.
However, Standard Chartered's Winters, whose bank is already heavily involved in the digital asset industry, sided with the crypto camp, noting that without yield, tokens lose their appeal as a "store of value." “Tokens are going to be used for two things. They’ll be used as a medium of exchange and as a store of value. And as a store of value, they’re much less interesting if they don’t carry a yield.”
Banks vs crypto
The tension extended to the U.S. legislative front.
While moderator Karen Tso suggested talks on the CLARITY Act had stalled—following Coinbase’s recent withdrawal of support—Armstrong insisted the process is simply in a spirited stage of revision.
“The legislation in the U.S. has been making good progress on market structure,” Armstrong said. “I wouldn’t say it’s stalled. I’d say there’s a good round of negotiation happening.”
Read more: Senate's next market structure draft likely pro-crypto, but industry insiders are worried Democrats may not be on board
However, Armstrong explained why he pulled out of the session last week, clarifying that the move was part of a defense against traditional finance gatekeepers. “We want to make sure any crypto legislation in the U.S. does not ban competition," he said, alleging banking “lobbying organizations in D.C. are trying to put their thumb on the scale and ban their competition, which I have zero tolerance for.”
Meanwhile, Garlinghouse, who largely agreed on the need for fairness, stressed that the “level playing field” argument cuts both ways.
“I agree very much with the idea of a level playing field,” he said. “Now, I also think a level playing field goes two ways and that crypto companies should be held to standards that banks are, and banks should be held to standards that crypto companies are.”
Read more: Here's why Coinbase and other companies soured on the major crypto bill
The bitcoin debate
The debate between Armstrong and Villeroy de Galhau intensified further when the discussion turned to Bitcoin.
Armstrong provocatively touted a transition to a "Bitcoin standard" as a hedge against the devaluation of paper currency. Villeroy counter-attacked by leaning on the necessity of democratic oversight, though he drew a quick correction from Armstrong after mischaracterizing Bitcoin’s structure.
“We’re also seeing the birth of a new monetary system that I would call the Bitcoin standard instead of the gold standard,” Armstrong said.
Villeroy dismissed the premise, arguing that monetary policy is inseparable from democratic sovereignty. “Monetary policy and money is part of sovereignty,” he said. “We live in democracies.”
The exchange escalated slightly when Villeroy tried to contrast trust and accountability in central banks with crypto, with a misguided understanding of the decentralized nature of bitcoin.
“The guarantee for trust is independence on the central bank side,” Villeroy said, adding he trusts “independent central banks with a democratic mandate” more than “private issuers of bitcoin.”
Armstrong corrected him immediately. “Bitcoin is a decentralized protocol. There’s actually no issuer of it,” he said. And then he took the opening further, turning Villeroy’s independence argument back on itself. “And so in the sense that central banks have independence, bitcoin is even more independent. There’s no country or company or individual who controls it in the world.”
Villeroy shrugged it off and instead warned that stablecoins and tokenized private money could accelerate what he framed as a political threat, particularly in emerging economies, especially if left unregulated.
“Innovation without regulation. It could create serious trust issues,” he said as he appeared to continue his criticism of bitcoin and cryptocurrencies. “The first threat is privatization of money, and loss of sovereignty,” he said, warning that if private money dominates, jurisdictions risk becoming dependent on foreign issuers.
Despite the friction, Ripple CEO Brad Garlinghouse — who took to X to say the debate had been "spirited" — noted a rare silver lining: all parties agreed that innovation and regulation must eventually find a way to coexist.
