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China’s Interest-Bearing e‑CNY Intensifies U.S. Fight Over Stablecoin Rewards

Crypto leaders warn that curbing rewards would weaken dollar stablecoins against China’s move to pay interest on digital yuan balances.

Overview

  • China’s central bank will allow commercial banks to pay interest on e‑CNY wallet balances starting January 1, 2026, according to Deputy Governor Lu Lei.
  • Coinbase policy chief Faryar Shirzad cautioned that limiting rewards during upcoming Senate market‑structure discussions could hand non‑U.S. stablecoins and CBDCs a competitive edge.
  • Coinbase CEO Brian Armstrong called reopening the GENIUS Act a red line and accused banks of pushing to restrict rewards to protect deposits.
  • Banking groups led by the Bank Policy Institute urged Congress to extend the law’s prohibition to platforms, citing risks of deposit displacement and reduced credit creation.
  • The GENIUS Act bars issuer‑paid interest but permits third‑party rewards, and reported data show stablecoin supply and yield‑bearing products expanded across 2025.