Digital dollar policy may fall behind China's e‑CNY, Coinbase says

Coinbase says U.S. rules stopping stablecoins from paying interest could make them less competitive. China will allow interest on the e‑CNY starting January 1, 2026.

Coinbase’s Chief Policy Officer, Faryar Shirzad, warned that current U.S. stablecoin rules could hand an advantage to China in digital finance. The People’s Bank of China announced it will permit interest on the e‑CNY starting January 1, 2026. The GENIUS Act, a key U.S. framework for stablecoins, currently bars issuers from paying interest directly to holders. Industry groups are divided, with banks urging strict limits and crypto advocates urging more flexibility. What was reported: - Faryar Shirzad of Coinbase warned U.S. policy could make dollar‑pegged stablecoins less competitive. - The PBoC will allow interest payments on e‑CNY balances beginning Jan 1, 2026. - The GENIUS Act currently prohibits stablecoin issuers from paying interest directly to holders. - China will integrate e‑CNY balances into banks’ asset‑liability plans and include deposit insurance coverage. - U.S. banking groups and crypto industry associations are publicly split on how to handle rewards and interest. Summary: The announcement may make interest‑bearing e‑CNY more attractive to domestic and international users and could shift some capital and activity toward rails that offer yield. You may want to follow ongoing Senate negotiations over the GENIUS Act, as legislative choices will shape whether U.S. dollar stablecoins remain competitive.