U.S. Stablecoin Debate Intensifies Amid China’s Digital Yuan Push
The U.S. regulatory stance on stablecoins is sparking geopolitical tensions as China advances its digital yuan strategy. Coinbase executives warn that the GENIUS Act's prohibition on interest-bearing stablecoins could erode the dollar's dominance in digital finance. Meanwhile, Beijing's decision to allow interest payments on e-CNY balances marks a strategic pivot from digital cash to deposit-like instruments.
China's central bank will permit commercial banks to pay interest on digital yuan holdings starting in 2026, potentially creating a competitive advantage against U.S. stablecoin projects. This development coincides with growing industry concerns about America's ability to maintain leadership in the blockchain-based financial infrastructure race.