Trump Family Ties Complicate Stablecoin Regulation. Brian Armstrong Weighs In

Despite ongoing debate over stablecoin legislation in the U.S., discussions in Congress have grown more complex due to the Trump family’s direct involvement in crypto projects.

Furthermore, this potential conflict of interest is making it harder to align proposals aimed at regulating both domestic and international issuers of digital assets.

Specifically, two bills are currently under consideration: 

• The STABLE Act in the House of Representatives 
• The GENIUS Act in the Senate

The main difference between them lies in how they approach oversight of foreign market players, such as Tether, the issuer of the world’s largest stablecoin, USDT.

Experts believe lawmakers could pass a regulatory framework as early as spring, with a final version expected by summer.

Related: Senate Banking Committee Passes Stablecoin Bill: What the Genius Act Means 

Trump Family Involvement Complicates the Process

At a press conference, House Financial Services Committee Chairman French Hill noted that the Trump family’s involvement in crypto projects (specifically the DeFi protocol World Liberty Financial and new interests in Bitcoin mining) is making it harder to build a balanced and fair regulatory framework.

Lawmakers have raised growing concerns about a potential conflict of interest, arguing that the family's activity in the crypto space could influence regulatory decision-making.

If you're going to have a stablecoin for use and activity in the U.S. and it's held out as a dollar-backed stablecoin, it ought to comply with the U.S. stablecoin regime,

French Hill noted.

Additionally, this added layer of political complexity may slow progress on both bills currently under discussion in the House and Senate, putting additional strain on the legislative process.

Related: World Liberty Financial Introduces USD1 Stablecoin

Brian Armstrong on Stablecoins and On-Chain Yield

Coinbase CEO Brian Armstrong shared a post on X, calling on U.S. lawmakers to revisit current regulations and make it possible for users to earn on-chain yield through stablecoins. 

Additionally, Armstrong emphasized that this change would allow everyday users to earn returns significantly higher than the average interest rates offered by traditional banks, which currently sit at just 0.41%.

The government shouldn’t put its thumb on the scale to benefit one industry over another. Banks and crypto companies alike should be allowed to, and incentivized to, share interest with consumers. This is consistent with a free market approach,

he wrote.

According to him, stablecoins, particularly USDC, have the potential to function like interest-bearing accounts, giving users a way to earn income from investments in reserve assets.

Related: Stablecoin Market Cap Surpasses $230B Following Trump’s Endorsement

Armstrong also emphasized that enabling on-chain yield could accelerate the adoption of digital dollars in the global economy by attracting new participants and supporting economic growth.

Despite differing regulatory approaches, both bills aim to establish a clear and effective framework for the stablecoin market, taking into account the interests of both domestic and international players. Moreover, lawmakers hope that reaching a consensus will encourage the development of innovative financial solutions and create a level playing field for all participants in the crypto market.

Related: Can Blockchain Fix Government Spending? Brian Armstrong Thinks So