A World Economic Forum panel in Davos intended to explore tokenization instead exposed deep divisions between crypto leaders and central bankers. The exchange highlighted unresolved tensions over stablecoin interest, Bitcoin’s role in the global system, and monetary sovereignty.
The sharpest disagreement centered on whether fiat-backed stablecoins should be allowed to pay interest. Coinbase CEO Brian Armstrong argued that interest-bearing stablecoins benefit consumers by increasing returns on cash-like assets and strengthening competitiveness against offshore and state-backed digital currencies. He warned that banning yield could push users toward less regulated alternatives.
French central bank governor François Villeroy de Galhau strongly disagreed, calling interest-bearing private tokens a risk to financial stability. He rejected the idea that a central bank digital currency should compete on yield, stressing that public money must prioritize systemic safety over returns.
The discussion broadened to US crypto legislation, with Armstrong defending his company’s withdrawal of support for a pending market structure bill. He framed the move as resistance to bank lobbying that could restrict competition, insisting that negotiations are ongoing rather than stalled. Other panelists echoed the need for a level regulatory field, arguing that both banks and crypto firms should meet comparable standards.
Ripple CEO Brad Garlinghouse — who took to X;
Tensions escalated further when Armstrong described Bitcoin as the foundation of a potential new monetary standard. Villeroy countered that money and monetary policy are inseparable from democratic oversight. Armstrong responded by emphasizing that Bitcoin has no issuer and is fully decentralized, making it independent of any state or institution.
Despite sharp disagreements, panelists converged on one point: innovation and regulation must coexist. The Davos debate underscored how unresolved questions around trust, sovereignty, and competition continue to shape the future of global finance.
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