Coinbase CEO Brian Armstrong stated that he intends to leverage the World Economic Forum in Davos this week to maintain pressure on U.S. lawmakers to enact a long-awaited crypto market structure bill. These remarks come as Coinbase continues its lobbying efforts for more defined rules concerning digital assets, despite the company having previously withdrawn its support from a revised Senate draft.
Armstrong characterized his participation in the Davos meetings, which are scheduled from January 19th to 23rd, as a working session with global leaders and prominent banking executives. These discussions are taking place while Washington D.C. is actively debating the regulatory framework for stablecoins, tokenization, and decentralized finance.
Armstrong Engages Global Leaders on Crypto Market Structure
Armstrong confirmed his plans to meet with CEOs of major banks during the Davos proceedings. He indicated that these meetings will concentrate on resolving outstanding conflicts and shaping legislation that benefits both cryptocurrency firms and traditional financial institutions. In addition to advocating for new regulations in the United States, Armstrong also expressed his desire to articulate how cryptocurrencies can modernize financial systems and broaden financial access on a global scale.
He posited that stablecoins could present new opportunities for banks and crypto platforms, provided that regulators implement consistent standards across the entire industry. Consequently, Coinbase is urging lawmakers to avoid enacting regulations that primarily serve to protect established players while simultaneously restricting competition from emerging financial technologies.
Reasons Behind Coinbase's Withdrawal from the Senate Draft
Coinbase decided to step back from supporting the Senate's revised CLARITY Act language after a thorough review that highlighted several significant objections. The company raised concerns regarding limitations placed on tokenized equities, the potential for expanded government access to DeFi transaction data, and an increased role for the Securities and Exchange Commission. Furthermore, Coinbase cautioned that certain provisions within the proposed stablecoin framework could disproportionately favor large banks, thereby skewing the market.
The debate surrounding stablecoin yields emerged as the primary point of contention. The Senate draft proposed prohibiting platforms from offering yield simply for holding stablecoins. This proposal was supported by banks, who expressed concerns that stablecoin rewards could divert deposits away from traditional savings accounts. However, the draft did permit rewards associated with specific activities, such as transactions, staking, or providing liquidity.
Tokenization and Political Dynamics Intensify Regulatory Pressure
Armstrong also drew a connection between cryptocurrency policy and the concept of tokenization, which he described as a key enabler of broader investment access. He pointed out that a significant number of adults worldwide still lack access to high-quality investment products. He believes that tokenized assets have the potential to increase participation in capital markets and contribute to reducing long-term economic inequality.
Coinbase now intends to convey the feedback gathered from the Davos forum back to U.S. lawmakers and the administration. Notably, the Senate Banking Committee has postponed its markup hearing and has not yet announced a rescheduled date.
According to a report by Reuters, President Donald Trump is also expected to attend the Davos meetings, which is anticipated to add considerable political weight to the week's discussions. Furthermore, the coming weeks could prove decisive in determining whether the United States establishes clear national regulations for cryptocurrency or continues to lag behind other global regions in this area.