Gold Standard Dispute: Coinbase vs. Bank of France on Crypto Returns

An intense debate unfolded at the international forum between leaders of the traditional financial system and the crypto industry regarding fundamental approaches to organizing the monetary system. At the heart of the conflict is the question of the profitability of stablecoins and the long-term standard that should define the global economy: the modern gold standard or the decentralized Bitcoin protocol.

From Stablecoins to Bitcoin: Two Models of the Monetary System

Brian Armstrong, CEO of Coinbase, advocated for the right of token holders to earn rewards from their assets. His argument was multi-layered: firstly, people should not be deprived of the opportunity to earn on their own money; secondly, jurisdictions that ban the profitability of stablecoins will be at a disadvantage in the face of global competition.

Armstrong provided a concrete example: China has already announced its intention to ensure returns on its digital yuan. If American regulated stablecoins lose the ability to pay rewards, this will create a significant advantage for their offshore competitors and undermine the position of the American crypto industry in the global market.

Armstrong’s Argument: Competitive Advantage of the Gold Standard

The Coinbase CEO went further, proposing a radical re-evaluation of the very nature of money. In his view, the global financial systems will inevitably shift to the Bitcoin standard, as this asset provides protection against the devaluation of paper money. “We are witnessing the birth of a new monetary system — the Bitcoin standard replacing the gold standard,” Armstrong stated, drawing a historical parallel between the archaic gold standard and the modern digital alternative.

Armstrong’s approach is based on the idea that Bitcoin, as a decentralized protocol without a single issuer, has greater independence than any central bank. No government, company, or individual has control over BTC, making it a more reliable anchor for the monetary system than politically dependent central banks.

Central Banks’ Position: Why Sovereignty Matters More Than Innovation

François Villeroy de Galhau, representing the Bank of France and the European monetary system, took a diametrically opposite stance. He linked traditional money to the concept of democratic sovereignty and national independence, asserting that monetary policy and fiat currencies are an integral attribute of national authority.

According to the head of the French central bank, earnings from holding stablecoins pose a serious threat to the banking system and should be banned. Even the digital euro, which is currently being developed by the European Union’s central banks, should not generate financial income for its holders. Villeroy de Galhau explicitly disagreed with Armstrong’s proposal to transition to the gold standard in any form, seeing it as a threat to state power.

Villeroy de Galhau emphasized that stablecoins and tokenized assets could create serious political risks, especially in developing economies, if left without proper government regulation. His concern centers on the privatization of the monetary system and the potential loss of national sovereignty: if private money takes a dominant position, countries risk becoming dependent on foreign issuers.

CLARITY and the Future: At Stake — The Standard of the Monetary System

The escalating debate has practical implications in American politics. The US Senate’s CLARITY bill on cryptocurrency regulation has stalled, with consideration suspended indefinitely shortly after Coinbase opposed a provision that would ban earnings from holding stablecoins.

Armstrong explained the company’s position in Davos, emphasizing that US crypto legislation should not prohibit competition between stablecoin issuers and traditional banks. Essentially, it’s a choice between a centralized gold standard and a decentralized standard for the new monetary system — a choice each country must make independently.