Nikolas Sargeant
Coinbase chief executive Brian Armstrong stated the exchange cannot support the Senate's cryptocurrency market structure bill in its current form, injecting fresh uncertainty into Washington's latest attempt to establish regulatory frameworks for digital assets.
Senators introduced draft legislation earlier this week to clarify when tokens qualify as securities or commodities and to assign oversight of spot cryptocurrency markets to the Commodity Futures Trading Commission, a long-standing priority for much of the industry.
Armstrong posted his opposition on Wednesday after reviewing the legislative text. "After reviewing the Senate Banking draft text over the last 48hrs, Coinbase unfortunately can't support the bill as written," he stated.
Armstrong identified multiple concerns including what he characterized as a de facto ban on tokenized equities, restrictions affecting decentralized finance and privacy protections, and changes that would weaken the CFTC in ways potentially leaving innovation subject to Securities and Exchange Commission discretion.
Armstrong also criticized provisions limiting rewards tied to stablecoins, a contentious issue in an escalating lobbying battle between banks and cryptocurrency firms over whether yield-like payouts resemble deposit products requiring traditional banking regulation.
"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," Armstrong wrote.
The bill prohibits cryptocurrency companies from paying interest to consumers solely for holding stablecoins, though it permits rewards for specific activities including making payments or participating in loyalty programs, with disclosure rules to be established by the SEC and CFTC.
Coinbase's position carries significant weight as the company has been a central voice in market structure negotiations and a major contributor to pro-cryptocurrency political campaigns. Lawmakers had scheduled a Senate Banking Committee markup for 10 a.m. ET Thursday, but the session has since been postponed.
Separately, Galaxy Digital warned the Senate Banking draft extends beyond the House-passed Digital Asset Market Clarity Act on illicit finance provisions and could expand Treasury Department authority over cryptocurrency transfers through new special measures powers.
Galaxy compared that authority to tools created following the September 11 attacks under the Patriot Act, arguing Treasury could apply the powers broadly across offshore venues and transaction infrastructure if it designates certain jurisdictions, institutions, or transaction categories as primary money laundering concerns.
The legislative push arrives as the Trump administration signals more supportive positioning toward portions of the industry, with lawmakers attempting to replace enforcement-led uncertainty with clearer frameworks on oversight, disclosures, and market conduct.
For cryptocurrency markets, the coming days will prove critical. Either lawmakers revise the draft to maintain support from major platforms, or the bill stalls again, leaving the industry navigating the same fragmented landscape of agency guidance and litigation it has confronted for years.
