The United States may lose out to China due to stringent regulations on stablecoins, according to Coinbase representative Faryar Shirzad.
For those who misunderstand what’s at stake in the debate on offering rewards on US-issued stablecoins under the GENIUS Act, a sobering and timely announcement from the People’s Bank of China that they plan to pay interest on the Digital Yuan. 🇨🇳🇨🇳
Tokenization is the future and… pic.twitter.com/stg8ffKzT7
— Faryar Shirzad 🛡️ (@faryarshirzad) December 30, 2025
He pointed out the danger of limiting the yield on American assets. In his view, this gives an advantage to Beijing, which is implementing a mechanism for paying interest to users of the digital yuan (CBDC).
Debates continue in the US over the GENIUS Act. The legislation prohibits stablecoin issuers from paying interest to asset holders, and current discussions focus on the strictness of enforcing this rule.
The situation is heating up amid news from China. The People’s Bank of China announced that from January 1, 2026, commercial banks will be able to pay interest on digital yuan (e-CNY) deposits. Effectively, the regulator is transitioning e-CNY from the category of “digital cash” to a full-fledged savings asset.
Shirzad views this as a worrying signal. He believes that misguided Senate policies will benefit foreign CBDCs and non-American stablecoins.
The Coinbase executive emphasized that tokenization is the future, and US-jurisdiction stablecoins should remain a primary settlement tool. He urged lawmakers to protect the primacy of the dollar, rather than the interests of “entrenched players.”
Opinions in the US are divided. The Blockchain Association and over 125 companies are asking Congress not to ban yields. They argue that restrictions will weaken the competitiveness of US assets.
Meanwhile, the American Bankers Association insists on strict limitations. Traditional financial institutions fear that exchanges will find loopholes for hidden payments and attract clients away.
Back in November, the PBOC confirmed its stance on the illegal status of digital assets in the country and highlighted the risks associated with using stablecoins.