Coinbase CEO and French Central Bank Governor Debate Over Stablecoin Interest [Decenter]

Coinbase CEO Brian Armstrong has engaged in a public spat with the governor of the Bank of France over stablecoin interest payments. Armstrong previously withdrew his support for the Clarity Act, a proposed US cryptocurrency market structure bill that would restrict stablecoin interest payments, stating, "No law is better than bad law." As a result, discussions on the Clarity Act, originally scheduled to conclude in the US Senate this month, have stalled.

According to major foreign media outlets on the 21st (local time), during a panel discussion at the World Economic Forum (WEF) in Davos, Switzerland, CEO Armstrong engaged in a heated exchange with Bank of France Governor François Villeroy de Gallo. CoinDesk reported, "What was initially intended to be a discussion of blockchain technology in general devolved into a heated exchange between CEO Armstrong and Governor Villeroy."





Armstrong argued that paying interest to stablecoin holders is both a consumer right and a matter of global competitiveness. "Paying interest on stablecoins puts more money in consumers' pockets," he said. "People have the right to earn a fair return on their assets." He continued, "China has announced its intention to pay interest on its central bank digital currency (CBDC)," adding, "If interest payments are prohibited only for stablecoins regulated by the US, only foreign competitors will thrive."

Meanwhile, Governor Billrois warned that stablecoin interest payments could pose a systemic risk, potentially eroding banks' deposit base. He also made it clear that central bank digital currencies should not compete for yield. When asked whether euro stablecoins should pay interest, he resolutely stated, "No," emphasizing that "maintaining the stability of the financial system is also crucial for the public interest."



This debate is also intertwined with the stalled debate over the Clarity Act in the United States. Last week, CEO Armstrong announced his intention to withdraw his support for the Clarity Act, stating, "No law is better than a bad law." Following this, the Senate Banking Committee indefinitely postponed its hearing on the bill, which was scheduled for the 15th. Armstrong criticized the bill, saying, "We must ensure it doesn't stifle competition," and that "bank lobbying groups in Washington, D.C., are blocking competition to protect their own interests."

The American Bankers Association (ABA) estimates that up to $6.6 trillion (approximately 9,750 trillion won) in bank deposits could be withdrawn if stablecoin issuers offer incentives similar to interest. Earlier this month, the association sent a letter to the Senate urging them to block incentive structures that effectively pay interest.

The Clarity Act is currently scheduled for consideration by the U.S. Senate Agriculture Committee on the 27th. However, with discussions in the Senate Banking Committee currently stalled, significant hurdles are expected before the bill is merged and brought to the plenary session. It must pass both chambers and be signed by the President before it can become law. President Donald Trump is pushing for swift legislative progress. In his speech at the World Economic Forum that day, he expressed his desire to swiftly approve the cryptocurrency market structure bill, stating, "I want to make the United States the 'crypto capital of the world.'"

Reporter Park Min-joo