January 02, 2026
By Our Correspondent
China’s approach to stablecoins and central bank digital currencies (CBDCs) could leave the United States at a disadvantage if Washington adopts overly restrictive rules, according to Coinbase Chief Policy Officer Faryar Shirzad.
Shirzad warned that limiting yields on US-jurisdiction stablecoins risks undermining the competitiveness of American financial assets. He contrasted US policy debates with Beijing’s plans to allow interest payments on digital yuan (e-CNY) deposits, arguing that such moves could draw capital away from dollar-based systems.
The comments come as US lawmakers continue to debate the GENIUS Act, which would prohibit stablecoin issuers from paying interest to token holders. While the bill’s enforcement details remain unresolved, the question of yield has become a central fault line in the discussion.
Tensions intensified after the People’s Bank of China announced that, beginning January 1, 2026, commercial banks will be permitted to pay interest on digital yuan deposits. The move effectively transforms the e-CNY from a digital cash instrument into a savings vehicle.
Shirzad described the development as a warning sign, arguing that restrictive US legislation could benefit foreign CBDCs and non-American stablecoins. In his view, tokenization represents the future of finance, and stablecoins issued under US jurisdiction should remain the primary settlement layer for global markets. He urged lawmakers to prioritize the dollar’s long-term dominance rather than protect entrenched financial interests.
The debate has exposed sharp divisions within the US financial sector. The Blockchain Association, alongside more than 125 companies, has called on Congress to avoid banning yields on stablecoins, warning that such restrictions would erode the competitiveness of US assets.
Traditional banking groups have taken the opposite stance. The American Bankers Association has pushed for strict limits, citing concerns that crypto platforms could use yield-bearing stablecoins to attract deposits and circumvent existing banking regulations.
Despite its interest-bearing e-CNY initiative, the PBOC has reiterated that private digital assets remain banned in China. As recently as November, the central bank emphasized the risks associated with stablecoins, underscoring Beijing’s preference for state-controlled digital money over decentralized alternatives.
