Billionaire investor Philippe Laffont on Thursday called the idea of a non-yielding stablecoin “outrageous,” as U.S. lawmakers advanced a bill that would bar issuers from offering interest-bearing dollar-pegged tokens.

“How in the world is a stablecoin not bearing interest?” Laffont said at Coinbase’s State of Crypto event in New York. “That is outrageous, and that needs to be solved.”

Laffont, founder of hedge fund Coatue Management, which oversees about $60 billion in assets, argued that stablecoins should deliver passive income through “simple contracts” paying users the spot rate.

The approval of yield-bearing stablecoins has become a flashpoint between crypto lobbyists, banks, and regulators in recent months. Draft legislation, including the GENIUS Act, is being heavily lobbied by the industry to allow such tokens.

Coinbase CEO Brian Armstrong publicly appealed to U.S. lawmakers in March to include yield-bearing provisions.

“Why is it that when you put money in the stablecoin, you get rewards? Just make it a simple contract,” Laffont said Thursday, adding that stablecoins offer “so many use cases,” including flexible yield products.

Crypto firms have pushed for months to win approval for interest-generating stablecoins.

But financial regulators argue they could encourage consumers to pull funds from tightly regulated institutions and place them with riskier crypto platforms.

The debate escalated this spring as lawmakers advanced the GENIUS Act, which aims to establish a stablecoin regulatory framework.

By late spring, a clause banning yield-bearing tokens had gained momentum, casting uncertainty over the industry’s efforts.

Stablecoin adoption has surged over the past year. Market capitalization now stands at $251 billion, up 55 year-on-year, according to DefiLlama.

South Korea-based CryptoQuant attributes the rise to growing trading activity, increased usage for payments and transfers, and clearer U.S. policy signals, particularly since the start of the Trump administration.

Amid rising demand, several firms, including BitGo and BitGet, have launched dollar-pegged tokens.

Circle, the largest U.S. stablecoin issuer, has seen its stock price rise nearly 250 since its IPO earlier this month.

Edited by Sebastian Sinclair and James Rubin

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