Davos Forum Policy Clash: Armstrong-Villroux Debate and Brad Garlinghouse's Mediation Logic

The blockchain infrastructure discussion at the World Economic Forum (WEF) held in Davos, Switzerland, has emerged as a key issue surrounding cryptocurrency regulation. The panel, attended by global financial leaders including Ripple CEO Brad Garlinghouse, addressed differing positions on stablecoin yields, Bitcoin standards, and U.S. cryptocurrency legislation. This debate goes beyond academic proposals and involves policy issues that will shape the future direction of financial regulation.

Economic Implications of the Stablecoin Yield Debate

One of the core topics of the discussion was whether stablecoins should pay interest to holders. Coinbase CEO Brian Armstrong raised this as a matter of consumer rights and global competitiveness.

Armstrong’s argument developed along two axes. First, from a consumer perspective, he emphasized, “People should be able to earn higher returns on their assets,” and second, from a global competitiveness standpoint, he warned, “China has announced that its central bank digital currency (CBDC) will pay interest, and foreign stablecoins already exist. If U.S. regulations prohibit stablecoins from providing rewards, competitors will thrive.”

In response, François Villeroy de Galhau, Governor of the Bank of France, countered from a financial stability perspective. He stated, “The public purpose also includes maintaining the stability of the financial system,” and maintained that the digital euro should not offer yields. Villeroy’s warning is based on concerns that interest paid by private tokens could pose systemic risks to traditional finance.

Brad Garlinghouse’s Principles of Fair Competition

Ripple’s Brad Garlinghouse offered a notable centrist position in this debate. He said, “Competition is good, and a fair playing field is important,” but added, “Ripple does not have a significant stake in this fight.”

Garlinghouse’s key proposal was the concept of a “mutually fair competitive environment.” He emphasized, “Cryptocurrency companies should be subject to the same standards as banks, and banks should be subject to the same standards as crypto companies,” advocating for regulatory consistency and fairness. His mediating stance is seen as an effort to seek practical solutions amid extreme positions within the industry.

Standard Chartered CEO Bill Winters supported the crypto camp, noting, “Tokens will be used both as a means of exchange and a store of value, and without yields as a store of value, they are much less attractive.”

Bitcoin Standard and Sovereignty over Monetary Policy

The discussion intensified as it shifted to Bitcoin. Armstrong provocatively proposed a transition to a new monetary system based on a “Bitcoin standard,” as an alternative to declining fiat currency values.

Villeroy immediately rebutted, “Monetary policy and currency are part of sovereignty, and we live in a democratic country,” emphasizing that monetary policy cannot be separated from democratic oversight. His argument is based on the principle that monetary policy must be under democratic control.

Armstrong clarified Bitcoin’s nature, stating, “Bitcoin is a decentralized protocol, and there is no entity issuing it. No country, company, or individual controls it anywhere in the world,” highlighting its independence from central banks’ sovereignty.

Villeroy warned of the risks of unregulated innovation, cautioning, “Unregulated innovation can lead to serious trust issues,” especially concerned about the dominance of private currencies in emerging economies and the potential for uncontrollable risks.

Withdrawal of the CLARITY Bill and Tensions in the U.S. Legislature

The debate extended into specific legislative issues in the United States. Armstrong explained why Coinbase withdrew support for the CLARITY Act: “We want to ensure that no U.S. cryptocurrency legislation bans competition. Washington D.C.'s banking lobbying groups are trying to tilt the scales and prohibit competition, and I do not tolerate this at all.”

Armstrong assessed that U.S. legislation is “making significant progress on market structure” and that “positive negotiations are currently underway.” This indicates that the industry’s resistance is not just opposition but a strategic move to foster a fair competitive environment.

Surge of WLD Token and Worldcoin’s Biometric Strategy

In market news, the WLD token rose 13.87% in 24 hours to $0.52 as of January 29, 2026. According to Forbes, this is linked to news that Sam Altman’s OpenAI is exploring biometric social networks to counter online bots.

Reports suggest OpenAI considered using Apple’s Face ID or Worldcoin’s iris scanning device, Orb, to authenticate human users, though no official partnership has been confirmed. The World Network has raised $135 million and verified millions of identities, and despite regulatory investigations in Kenya and the UK, it proposes the World ID system as a privacy-focused identity verification tool.

Pudgy Penguins: A Model for Brand Growth in the NFT Market

In the NFT space, Pudgy Penguins has emerged as the most powerful NFT-native brand in this cycle. The project is shifting from speculative “digital luxury goods” to a multi-vertical consumer IP platform.

Strategically, Pudgy Penguins first acquires users through mainstream channels before onboarding into Web3. Its ecosystem includes physical products (retail sales exceeding $13 million, over 1 million units sold), gaming and experiences (Pudgy Party surpassed 500,000 downloads in two weeks), and widely distributed PENGU tokens. While the market currently values Pudgy as a premium IP compared to traditional counterparts, sustained success depends on retail expansion, game adoption, and deeper token utility.

Coexistence of Regulation and Innovation: Significance of the Davos Consensus

Despite tensions, panel participants reached a crucial common understanding. Representatives from each camp, including Brad Garlinghouse, agreed that ultimately, innovation and regulation must coexist. This is a significant signal beyond rhetorical consensus at Davos, shaping future policy development.

The debates among Armstrong, Villeroy, Garlinghouse, and Winters demonstrate that the cryptocurrency industry has grown beyond mere technological innovation to become a policymaking entity influencing the entire financial system’s future. Their positions at Davos are expected to serve as key reference points in the ongoing formation of U.S. legislation and global regulatory frameworks.