Coinbase Warns: Digital Dollar Policy Risks Losing Ground to e-CNY

Coinbase’s Chief Policy Officer, Faryar Shirzad, issued a stark informing that the U.S. risks conceding dominance successful integer concern to China implicit projected stablecoin regulations.

The alert comes arsenic the People’s Bank of China (PBoC) announced it volition licence involvement payments connected its integer yuan (e-CNY) starting January 1, 2026.

The geopolitical contented centers connected the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act.

The existent legislation, a cardinal model for regulating stablecoins successful the U.S., prohibits issuers from paying involvement straight to holders.

Shirzad argues this regularisation creates a captious competitory disadvantage for U.S. dollar-pegged stablecoins.

China’s determination efficaciously transforms the e-CNY from a elemental outgo instrumentality into a full-fledged savings asset, enhancing its entreaty for home and planetary adoption.

The PBoC’s determination volition integrate e-CNY balances into commercialized banks’ asset-liability management, with holdings besides covered by deposit insurance.

Shirzad cautioned that mishandling the rewards contented successful ongoing Senate negotiations could manus a important vantage to non-U.S. stablecoins and cardinal slope integer currencies (CBDCs).

The statement pits crypto advocates against banking incumbents. The American Bankers Association has called for strict enforcement of the involvement ban, arguing that reward programs could undermine accepted banking.

Conversely, the Blockchain Association and different manufacture players contend that the restrictions stifle innovation and cede crushed to planetary rivals.

The struggle is not simply astir user rewards. It is astir the aboriginal architecture of planetary integer settlement.

An interest-bearing sovereign integer currency similar the e-CNY presents a nonstop situation to the inferior of non-interest-bearing U.S. dollar stablecoins arsenic a reserve plus for planetary corporations and fiscal institutions.

If U.S. argumentation makes its integer dollar little attractive, superior and innovation volition travel toward rails wherever output is possible.

This threatens to erode the web effects that person made USD-backed stablecoins the ascendant mean for on-chain worth transfer, perchance impacting liquidity, trading volumes, and the dollar’s primacy successful the adjacent procreation of finance.

Read archetypal communicative Coinbase Warns: Digital Dollar Policy Risks Losing Ground to e-CNY by Hamza Tariq astatine Coinspeaker.com