Coinbase's Stance on the Current Bill Draft
Brian Armstrong, CEO of Coinbase, has stated that the company can no longer support the U.S. Senate's crypto market structure bill as it is currently drafted. This decision highlights growing disagreements between lawmakers and the cryptocurrency industry regarding the regulation of digital assets.
Armstrong indicated in a statement on X that after reviewing the Senate Banking Committee's draft over the past 48 hours, Coinbase concluded that the bill would be "materially worse than the status quo."
While acknowledging the bipartisan effort behind the legislation, Armstrong expressed that Coinbase would prefer to see no bill passed rather than support a framework that he believes would negatively impact innovation and competition within the U.S. crypto sector.
Key Concerns Regarding Tokenization, DeFi, and Stablecoins
In his statement on X, Armstrong detailed several specific provisions that he argued make the bill unacceptable in its current form.
He contended that the draft could effectively ban tokenized equities, impose restrictions on decentralized finance (DeFi) that would increase government access to user financial data, and diminish the authority of the Commodity Futures Trading Commission (CFTC) by making it subordinate to the Securities and Exchange Commission (SEC).
Armstrong also voiced criticism of proposed amendments that would limit rewards on stablecoins. He suggested that such measures would unfairly benefit traditional banks by restricting competition from crypto-native payment and yield products.
Stablecoin provisions have already become a highly contentious aspect of the Senate draft. Banking groups have raised concerns that stablecoin rewards could divert deposits from insured institutions, while crypto firms argue that prohibiting them would be anti-competitive.
Despite withdrawing support for the current draft, Armstrong conveyed his optimism that lawmakers can achieve a more favorable outcome through ongoing negotiation and engagement.
Legislative Goals: Clarity After Years of Regulatory Uncertainty
The Senate draft is part of a larger initiative to establish a clear statutory framework for crypto markets, aiming to move beyond years of regulation primarily driven by enforcement actions.
Lawmakers have been working to define when digital assets should be classified as securities or commodities. They also aim to clarify the regulatory jurisdiction between the SEC and CFTC, a critical issue that has come to the forefront following significant enforcement actions and the collapses of major exchanges.
Earlier in the week, the Senate Agriculture Committee announced a timeline to release its own market structure text and conduct a markup session later this month, indicating progress toward formal legislative debate.
Industry executives had previously suggested that clearer statutory rules could mitigate legal risks and encourage greater institutional participation. However, they emphasized that such a framework must deliver certainty rather than introduce new forms of ambiguity.