As the world's elites and crypto's top leaders gathered in Davos, Switzerland, for the World Economic Forum, a panel billed as a discussion on blockchain plumbing turned into a sharp-edged debate between Coinbase CEO Brian Armstrong and Bank of France Governor François Villeroy de Galhau over stablecoin yields and bitcoin.
While the panel, "Is Tokenization the Future?" was meant to focus on tokenization, most of the discussion centered on stablecoin rewards, bitcoin, and the state of U.S. Senate discussions over the CLARITY Act, which was recently delayed just a few hours after Coinbase pulled its support.
The primary flashpoint centered on stablecoins—specifically, whether fiat-pegged tokens should pay interest to holders. Armstrong framed the issue as a matter of global competitiveness and consumer rights.
“First, it puts more money in consumers’ pockets. People should be able to earn more on their money,” Armstrong argued. “Second, global competitiveness: China has said its CBDC will pay interest, and offshore stablecoins already exist. If U.S.-regulated stablecoins are banned from paying rewards, offshore competitors flourish."
Villeroy de Galhau remained unmoved, viewing interest-bearing private tokens as a systemic risk to traditional banking. He rejected the notion that a CBDC should compete on yield. When asked if a digital euro should pay interest, the Governor was blunt: “The answer is no,” he said. “The public purpose should also be to preserve the stability of the financial system.”
The panel also included Standard Chartered CEO Bill Winters, Ripple CEO Brad Garlinghouse, and Euroclear CEO Valérie Urbain, alongside moderator Karen Tso, a CNBC Squawk Box co-anchor.
Garlinghouse had a more conciliatory response to the question of yield, saying that "competition is good, and a level playing field matters," although he clarified that “Ripple doesn’t have as much of a dog in that fight.
However, Standard Chartered's Winters, whose bank is already heavily involved in the digital asset industry, sided with the crypto camp, noting that without yield, tokens lose their appeal as a "store of value." “Tokens are going to be used for two things. They’ll be used as a medium of exchange and as a store of value. And as a store of value, they’re much less interesting if they don’t carry a yield.”
The tension extended to the U.S. legislative front.
While moderator Karen Tso suggested talks on the CLARITY Act had stalled—following Coinbase’s recent withdrawal of support—Armstrong insisted the process is simply in a spirited stage of revision.