Coinbase CEO Brian Armstrong said the exchange cannot support the Senate Banking Committee’s latest draft of the Clarity Act, warning that the bill, as written, would leave the U.S. crypto industry worse off than the current regulatory status quo.
In his post about X, Armstrong cited several concerns, including what he described as a de facto ban on tokenized stocks, new restrictions on decentralized finance that could give the government broad access to users’ financial data, and provisions that weaken the Commodity Futures Trading Commission while expanding the powers of the Securities and Exchange Commission.
“After reviewing the text of the Senate Banking Bill over the past 48 hours, Coinbase unfortunately cannot support the bill as written,” Armstrong wrote in a post.
He also criticized the proposed amendment to eliminate stablecoin fees, arguing that it would allow banks to rein in emerging competitors.
“It’s better to have no invoice than a fraudulent invoice,” Armstrong said at X, adding that Coinbase will continue to promote a framework that puts cryptocurrencies on the same playing field as traditional financial services.
The comments came a day before the Senate Banking Committee is expected to mark up the Clarity Act on Thursday, Jan. 15.
The bill seeks to clarify the U.S. digital asset market structure by defining categories such as digital products, investment contracts, and payment stablecoins, while dividing oversight between the SEC and CFTC.
Issues with Coinbase stablecoin rewards
Stablecoin rewards have emerged as a hot topic in negotiations. Coinbase had reportedly warned lawmakers that it could withdraw its support for the bill if it restricts yield programs associated with stablecoins like USD Coin.
Coinbase shares the interest income generated from USDC reserves and uses a portion of that income to provide incentives to users. This includes approximately 3.5% rewards for Coinbase One customers.
Stablecoin-related revenue could reach $1.3 billion in 2025, and this issue is central to Coinbase’s business model.
Banking organizations argue that high-yield stablecoins could steal deposits from traditional banks, while crypto companies counter that banning rewards will stifle innovation and drive users to offshore platforms.
“I’m pretty optimistic that if we keep trying we’ll get the right results,” Armstrong later wrote in a post on X. “We will continue to show up and work with everyone to reach our goals.”
Michael Saylor, executive chairman of strategy, retweeted Armstrong’s post to show support for his decision.
