Crypto Reporter
Shalini Nagarajan
Crypto Reporter
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Coinbase chief executive Brian Armstrong said the exchange cannot support a new Senate crypto bill in its current form, injecting fresh uncertainty into Washington’s latest attempt to set ground rules for digital assets.
Senators introduced the draft earlier this week to clarify when tokens count as securities or commodities, and to place oversight of spot crypto markets with the Commodity Futures Trading Commission, a long-running priority for much of the industry.
Armstrong posted his opposition on Wednesday after reviewing the text, writing, “After reviewing the Senate Banking draft text over the last 48hrs, Coinbase unfortunately can’t support the bill as written.”
Image Source: X/@brian_armstrong
Armstrong Flags Risks To Tokenization, DeFi And Privacy
He said the draft carries too many problems, including what he described as a de facto ban on tokenized equities, restrictions affecting decentralized finance and privacy, and changes that would weaken the CFTC in ways that could leave innovation at the mercy of the Securities and Exchange Commission.
Armstrong also took aim at provisions that would limit rewards tied to stablecoins, a flashpoint in a widening lobbying fight between banks and crypto firms over whether yield like payouts resemble deposit products.
“We appreciate all the hard work by members of the Senate to reach a bi-partisan outcome, but this version would be materially worse than the current status quo. We’d rather have no bill than a bad bill. Hopefully we can all get to a better draft.”
The bill does not allow crypto companies to pay interest to consumers solely for holding a stablecoin, although it still permits rewards for certain activities such as making payments or joining loyalty programs, with disclosure rules to be set by the SEC and CFTC.
Crypto Industry Watches Closely As Bill Enters Critical Phase
Coinbase’s stance matters because the company has been a central voice in market structure negotiations and a major spender in pro-crypto political campaigns. Lawmakers were set to begin a Senate Banking Committee markup at 10 am ET on Thursday, but the session has since been postponed.
Separately, Galaxy said the Senate Banking draft goes further than the House passed Digital Asset Market Clarity Act on illicit finance, and warned it could expand the Treasury Department’s reach into crypto transfers through a new special measures authority.
Galaxy compared that power to tools created after the September 11 attacks under the Patriot Act, arguing Treasury could apply the authority broadly across offshore venues and transaction rails if it labels certain jurisdictions, institutions, or transaction categories as primary money laundering concerns.
The push for a Senate framework lands as the Trump administration signals a more supportive tone toward parts of the industry, and as lawmakers try to replace enforcement led uncertainty with clearer lines on oversight, disclosures, and market conduct.
For crypto markets, the next few days will set the temperature, either lawmakers soften the draft to keep major platforms onside, or the bill slows again, leaving the industry to navigate the same patchwork of agency guidance and courtroom fights it has lived with for years.
