A senior executive at Coinbase has cautioned that the United States could lose competitive ground in global digital finance if dollar backed stablecoins are prevented from offering user incentives under emerging regulations. Faryar Shirzad, Coinbase’s chief policy officer, said the debate around so called stablecoin rewards has taken on greater urgency after China announced plans to allow interest payments on digital yuan wallets starting in 2026. Shirzad argued that limiting the ability of US stablecoin ecosystems to offer comparable incentives could weaken the international appeal of dollar based digital assets. He framed the issue as one of strategic competition rather than narrow regulatory detail, warning that policy missteps could advantage foreign stablecoins and state backed digital currencies at a time when global payment systems are rapidly evolving.
China’s move is centered on its central bank digital currency, with the People’s Bank of China signaling a transition of the digital yuan toward deposit like functionality. Under the plan, commercial banks will be allowed to pay interest on digital yuan balances, expanding its role beyond basic digital cash. Chinese officials have described the digital yuan as serving multiple monetary functions, including value storage and cross border payments. This development follows broader efforts by Beijing to internationalize its CBDC infrastructure and contrasts sharply with the US position. American policymakers have rejected a domestic CBDC model, citing privacy and surveillance concerns, and instead opted to support privately issued dollar stablecoins within a regulated framework established by the GENIUS Act.
The GENIUS Act provided long awaited clarity for US stablecoin issuers but included restrictions on paying direct interest, while allowing some flexibility for third party reward mechanisms. This nuance has become a focal point in ongoing market structure debates in Congress. Banking groups have urged strict enforcement, warning that yield like incentives could disrupt traditional deposits and credit markets. At the same time, crypto industry associations argue that overly rigid rules would stifle competition and undermine the intent of the law. Shirzad emphasized that the stakes extend beyond domestic market dynamics, warning that global rivals could gain an advantage if US stablecoins are constrained. He urged lawmakers to prioritize the long term strength of the dollar and US financial leadership as negotiations continue.
