Coinbase CEO Brian Armstrong is calling for legislative changes in the US to allow stablecoin holders to earn “onchain interest” on their holdings.

In a March 31 post on X, Armstrong argued that crypto companies should be treated similarly to banks and be “allowed to, and incentivized to, share interest with consumers.” He added that allowing onchain interest would be “consistent with a free market approach.”

Source: Brian Armstrong

There are currently two competing pieces of federal stablecoin legislation working their way through the legislative process in the US: the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act, and the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act.

In reference to the stablecoin legislation, Armstrong said the US had an opportunity to “level the playing field and ensure these laws pave a way for all regulated stablecoins to deliver interest directly to consumers, the same way a savings or checking account can.” 

Armstrong: Onchain interest a boon for US economy

Armstrong argued that while stablecoins have already found product-market fit by “digitizing the dollar and other fiat currencies,” the addition of onchain interest would allow “the average person, and the US economy, to reap the full benefits.”

He said that if legislative changes allowed stablecoin issuers to pay interest to holders, US consumers could earn a yield of around 4% on their holdings, far outstripping the 2024 average interest yield on a consumer savings account, which Armstrong cited as 0.41%.

Armstrong also said onchain interest could benefit the broader US economy — by incentivizing the global use of US dollar stablecoins. This could see their use grow, “pulling dollars back to U.S. treasuries and extending dollar dominance in an increasingly digital global economy,” according to the Coinbase CEO. 

He also argued that the potential for a higher yield than traditional savings accounts would result in “more yield in consumers’ hands means more spending, saving, investing — fueling economic growth in all local economies where stablecoins are held.”

“If we don’t unlock onchain interest, the U.S. misses out on billions more USD users and trillions in potential cash flows,” Armstrong added.

Currently, neither the STABLE Act nor the GENIUS Act gives the legal go-ahead for onchain interest-generating stablecoins. In fact, in its current form, the STABLE Act includes a short passage prohibiting “payment stablecoin” issuers from paying yield to holders:

Source: STABLE Act

Related: Stablecoins, tokenized assets gain as Trump tariffs loom

Similarly, the GENIUS Act, which recently passed the Senate Banking Committee by a vote of 18-6, has been amended to exclude interest-bearing instruments from its definition of a “payment stablecoin.”

Commenting on the current state of the STABLE Act, Representative Bryan Steil told Eleanor Terrett, host of the Crypto in America podcast, that two pieces of legislation are positioned to “mirror up” following a few more draft rounds in the House and Senate — due to the differences between them being textual rather than substantive.

“At the end of the day, I think there’s recognition that we want to work with our Senate colleagues to get this across the line,” Steil said.

Magazine: SEC’s U-turn on crypto leaves key questions unanswered

A new semi-permissionless privacy tool, Privacy Pools, has launched on Ethereum, allowing users to transact privately while proving their funds aren’t linked to illicit activities.

The privacy tool, launched by Ethereum builders 0xbow.io on March 31, earned support from the likes of Ethereum co-founder Vitalik Buterin, who not only backed the privacy project but made one of the first deposits on the platform. 

0xbow.io said that it implements “Association Sets” to batch transactions into the anonymous Privacy Pools and that a screening test is conducted to ensure that those transactions aren’t linked to illicit actors, such as hackers, phishers and scammers.

gm Ethereum

It is our great honor to announce the mainnet launch of Privacy Pools!

ETH users can now achieve on-chain privacy, while still dissociating from illicit funds

It is now up to all of us to Make Privacy Normal Again

More info in this thread pic.twitter.com/3nJO0AxoD1

— 0xbow.io (@0xbowio) March 31, 2025

The Association Sets are “dynamic” — meaning that if a transaction is admitted but later found to be illicit, it can be removed from the set without disrupting any other deposits, 0xbow.io said.

If a deposit is disqualified, the user can click the “ragequit” function to return the funds to their original deposit address.

The innovation is part of 0xbow.io’s vision to “Make Privacy Normal Again” while also attempting to achieve regulatory compliance.  

Privacy protocols have received considerable backlash from regulators in recent years due to their increasing use by illicit actors to launder funds. 

One of those privacy tools, Tornado Cash, was sanctioned by the US Treasury’s Office of Foreign Assets Control (OFAC) between August 2022 and March 2025 after it was linked to around $7 billion laundered by the North Korean state-backed Lazarus Group.

Tornado Cash has since been removed from OFAC’s blacklist after a US appeals court said the sanctions were unlawful in January 2025.

0xbow.io noted that initial deposits are limited to 1 Ether (ETH) but that the limit would be raised once the privacy protocol is more battle-tested.

Privacy Pools inspired by Buterin and others

Over 21 ETH has already been transferred into Privacy Pools from 69 deposits, including at least one from Buterin, 0xbow.io noted.

Source: Vitalik Buterin

In addition to Buterin, 0xbow.io said it also received investment support from Number Group, BanklessVC, Public Works and several angel investors.

Related: Privacy isn’t a luxury in crypto, it’s a necessity — Midnight CEO

0xbow.io also praised Buterin, Chainalysis Chief Scientist Jacob Illum, and two academics at the University of Basel in Switzerland for crafting a September 2023 white paper outlining how Privacy Pools could be built. 

0xbow.io strategic adviser Ameen Soleimani also contributed to the paper, which has seen over 12,000 downloads and has been cited in nine other papers.

The Privacy Pool code also passed a successful audit from Audit Wizard. a smart contract auditing firm co-founded by former Apple engineer Joe van Loon.

More than $41 billion worth of illicit transfers were made in 2024,  which made up 0.14% of total onchain volume for the year, according to the Chainalysis 2025 Crypto Crime report published on Jan. 15.

While it marked around an 11% fall from 2023, Chainalysis said that figure could climb to around $51 billion as more criminal-tied addresses are found.

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Hyperliquid is one of the current bull market’s standout DeFi success stories. With daily trading volumes having reached $4 billion, the exchange has become the largest decentralized (DEX) derivatives platform, commanding nearly 60% of the market.

Hyperliquid still lags far behind Binance Futures’ $50 billion daily average volume, but the trend suggests that it has started to encroach on centralized exchange (CEX) territory.

What’s behind Hyperliquid’s parabolic rise?

Launched in 2023, Hyperliquid gained popularity in April 2024 after launching spot trading. This, combined with its aggressive listing strategy and easy-to-use onchain user interface, helped to lure in a wave of new users.

The platform’s real explosion, however, came in November 2024, following the launch of its HYPE (HYPE) token. Hyperliquid’s trading volume skyrocketed, and it now boasts over 400,000 users and more than 50 billion trades processed, according to data from Dune.

Hyperliquid cumulative trades and users. Source: Dune

While Hyperliquid started as a high-performance perpetual futures and spot DEX, its ambitions have since expanded. With the launch of HyperEVM on Feb. 18, the project has become a general-purpose layer-1 chain capable of supporting third-party DeFi apps built on top of its infrastructure. 

As one of Hyperliquid’s founders, Jeff Yan, put it, 

“Most L1s build infrastructure and hope that others will come build the killer apps. Hyperliquid takes the opposite approach: polish a native application and then grow into general-purpose infrastructure.”

If this approach works, the liquidity driven by Hyperliquid’s core DEX could naturally feed into the broader ecosystem and vice versa, creating a flywheel effect.

Related: Hyperliquid flips Solana in fees, but is the ‘HYPE’ justified?

Will Hyperliquid become a sustainable CEX alternative?

According to CoinGecko, Hyperliquid now ranks 14th among derivatives exchanges by open interest, sitting at $3.1 billion. That’s still behind Binance’s $22 billion but ahead of older names like Deribit or derivatives divisions of Crypto.com, BitMEX, or KuCoin. It’s the first time a DEX is competing so closely with established CEXs.

Furthermore, as Hyperliquid deepens its focus on specialized trading pairs, it continues to chip away at the market share of major exchanges. The DEX accepts not only Arbitrum USDC as collateral but also native BTC. This makes it one of the few decentralized platforms that handle BTC wrapping and unwrapping natively, giving users the option to use BTC for Web3-wallet-based trading.

X user Skewga.hl noted that Hyperliquid’s BTC perpetual futures volume share recently hit an all-time high, reaching almost 50% of Bybit’s and 21% of Binance’s. Skewga.hl wrote,

“No DEX has ever come this close to matching Tier 1 CEX volume.” 

Daily volume ratios, Hyperliquid vs Other exchanges (BTC perp). Source: Skewga.hl

Since 2024, perpetual swaps have seen a revival as a trading tool. During the 2021–2022 bull market, daily perps volume averaged around $5 billion. In early 2025, that number often exceeded $15 billion, with Hyperliquid accounting for nearly two-thirds of it.

Data from DefiLlama illustrates the shift: while dYdX (green) dominated in 2023–2024, the landscape diversified significantly in 2024—and by 2025, Hyperliquid (pink) had taken the lead.

Perps volume breakdown. Source: DefiLlama

Despite the recent JELLY token scandal, which involved the exchange halting trading and delisting a low-market-cap token that a whale had exploited, Hyperliquid remains a popular exchange among DeFi and DEX traders. It has yet to capture institutional investor flows or scale to the level of top-tier CEXs. However, if its layer 1 ecosystem gains traction with developers, Hyperliquid could evolve into more than just a leading DEX.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.