in the USA stablecoinThe interest ban debate has turned into a geopolitical and financial competition topic with China’s digital yuan move. Warnings from Coinbase’s senior executives brought to the fore the view that the implementation of the GENIUS Act, which became law in July, could weaken the global position of the US dollar in the digital currency field. At the center of the debate is the ban on stablecoins for payment purposes from offering returns. USA whether it will put centric projects at a disadvantage against foreign competitors. China’s preparations to allow interest payments for digital yuan stand out as the development that rapidly increases these concerns.
Critical Breakthrough in China’s Digital Yuan Strategy
Central Bank of Chinaannounced that a significant policy change will be made in order to increase the use of the digital yuan, which has been tested with pilot applications for years. According to the new framework, commercial banks will be able to pay interest on customers’ digital yuan balances as of January 1, 2026. With this regulation, e-CNY will cease to be a tool that only functions as digital cash and will become a “digital deposit money”.
Authorities emphasize that the main purpose of this approach is to stimulate limited user interest. It aims to make the interest-yielding digital yuan more competitive with classical bank deposits. Like this Chinesenot only establishes technological infrastructure in the field of digital money, but also introduces economic incentives that will direct user behavior.
An interest-paying central bank when viewed internationally digital moneyThe spread of borders creates a new competition topic in terms of cross-border payments and reserve currency balances. For US policymakers, the main debate focuses on whether this development will reduce the attractiveness of dollar-based digital assets.
Political and Sectoral Dimensions of the Stablecoin Interest Debate in the USA
It came into force in the USA in July. GENIUS Actprohibits dollar-denominated payment stablecoins from offering direct interest or returns. The goal of the law is to position stablecoins as means of payment and limit direct competition with the banking system. However cryptocurrency Reactions from the industry are that strict implementation of the ban may cause US-based projects to fall behind in global competition.
coinbaseIn the statements made by the policy team of , it was emphasized that the future of cryptocurrencies will be shaped by tokenization and that a flexible regulatory environment is needed for the dollar to remain the leader in this ecosystem. China’s opening of the interest rate path for the digital yuan has made the debate in the USA even more urgent.
The banking side has a different opinion. Banking associations argue that incentives such as interest or rewards can divert deposits away from the traditional system and pose a risk to financial stability. Dissenting letters sent to the US Congress in December reveal that the regulatory debate is not only technical but also involves a strong conflict of interest.
