Armstrong further mentioned:
Rewards (or even paying interest) benefits ordinary people just like community lending does. We have to let the market do both.
He referenced reports that China will begin paying interest on its official digital currency, the digital yuan, starting Jan. 1. Commercial banks operating digital yuan wallets will credit users based on balances held, a step that grants the E-CNY the same legal status as deposits at commercial banks and reshapes its technical framework. The initiative follows years of pilot programs that have processed trillions of yuan in transactions, even as adoption has lagged behind Wechat Pay and Alipay, reinforcing concerns that incentives may determine which digital currencies achieve scale.
FAQ ⏰ Why is China paying interest on the digital yuan? China aims to boost adoption and competitiveness by rewarding users who hold balances in the digital yuan. What warning did Coinbase CEO Brian Armstrong issue? He said U.S. stablecoins risk falling behind globally if they cannot offer rewards or interest. How could interest-bearing digital currency affect global payments? Incentives can drive liquidity, usage, and dominance in cross-border payments and settlements. Why does U.S. policy matter in the stablecoin race? Regulatory hesitation may limit innovation and weaken U.S. influence in digital money markets.
