Brian Armstrong Highlights Stablecoins’ Role in Global Dollar Access

• Stablecoins are expanding beyond trading by meeting global demand for dollar access and low-cost payments.
• China’s interest-bearing digital yuan has intensified scrutiny of U.S. stablecoin reward restrictions.
• Research finds stablecoin rewards show no meaningful impact on bank deposits or lending levels.

Stablecoins are emerging as a core use case for cryptocurrency beyond speculative trading, according to comments from Brian Armstrong, who highlighted global demand for dollar access and rising geopolitical competition in digital payments.

In a series of remarks, Armstrong noted that access to financial services remains uneven worldwide, as most of the global population resides outside the United States and lacks access to dollar-denominated bank accounts. He pointed out that stablecoins allow individuals with smartphones to hold digital representations of U.S. dollars and transfer value globally at low cost and near-instant speed.

Dollar Demand Outside the U.S. Drives Stablecoin Use

Armstrong highlighted that demand for dollars is strongest in regions facing high inflation or currency instability. He referenced conditions in countries such as Nigeria, where inflation reached between 50% and 70% last year, limiting the purchasing power of local currencies. According to Armstrong, stablecoins enable users in such markets to store value in dollars without relying on traditional banking systems.

He highlighted that stablecoins function as one-to-one digital representations of fiat currency held in custody, allowing holders to move funds without the delays or fees associated with banks, remittance services, or card networks. Armstrong noted that traditional remittance channels often charge between 5% and 12% per transaction, while stablecoin transfers can settle in seconds for less than one cent.

China’s Digital Yuan Adds Competitive Pressure

Armstrong’s remarks on stablecoins came amid warnings over U.S. regulatory developments after China revealed it would offer interest on its central bank digital currency, the Digital Yuan. He said restrictions on stablecoin rewards could weaken the competitiveness of U.S.-based digital payment systems as global alternatives expand.

He stated that offering rewards on stablecoins does not necessarily reduce lending activity, but can instead influence consumer adoption. His remarks came as the U.S. Senate Banking Committee prepares to review a market structure bill that may include limits on stablecoin incentives.

Research Disputes Claims of Banking Impact

Coinbase Chief Policy Officer Faryar Shirzad clarified that opposition to stablecoin rewards stems from concerns about competition rather than financial stability risks. He cited research from Charles River Associates showing no correlation between USDC usage and deposit outflows at community banks. A separate Cornell University study found that stablecoin rewards would need to approach 6% to have an impact on bank deposits.

Shirzad also pointed to the previously passed GENIUS framework, which allows stablecoin rewards under defined conditions, warning that reopening the issue could disrupt regulatory clarity.

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