Coinbase’s chief of institutional strategy has indicated that the completion of comprehensive crypto market structure legislation is expected to take longer than the stablecoin regulations. However, he remains optimistic that bipartisan efforts will lead to the bill’s passage by 2026. John D’Agostino shared his insights in a recent interview, highlighting the increasing urgency for regulatory clarity amid growing competition from foreign jurisdictions.
The Senate Banking Committee has scheduled a markup for the CLARITY Act on January 15, following protracted delays attributed to internal disagreements regarding decentralized finance (DeFi) oversight and token classifications. D’Agostino acknowledged the complexity of the legislation, noting that it addresses intricate issues compared to simpler regulatory matters that have been tackled previously.
This legislation is seen as foundational for the future expansion of the crypto sector. D’Agostino pointed out that other regions, particularly Europe with its Markets in Crypto-Assets (MiCA) framework, are making significant strides in regulatory clarity, posing competitive threats to the U.S. He expressed concern over a talent exodus, with a noted shift of intellectual capital and technological advancement away from the United States.
Despite uncertainties surrounding the timing of the bill’s passage, D’Agostino’s confidence stems from global competitive dynamics. He referenced the successful push for stablecoin legislation through the GENIUS Act as a model for overcoming existing hurdles, suggesting that the same momentum will carry over when lawmakers reconvene after recess.
The current draft of the CLARITY Act designates the Commodity Futures Trading Commission (CFTC) as the primary regulatory body for non-security fungible tokens meeting decentralization requirements. Conversely, tokens with ongoing managerial efforts and revenue-sharing elements would fall under the Securities and Exchange Commission (SEC).
Observations from lobbyists indicate that the bill may treat DeFi front-end operators and fee-collecting decentralized autonomous organizations (DAOs) as registrants. It will also aim to provide safe harbors for immutable smart contracts that lack upgrade keys.
Members from both sides of the aisle have expressed a desire to avoid past scenarios where House-approved digital asset bills failed to progress in the Senate. An effective markup yielding a bipartisan managers’ amendment could pave the way for acquiring the necessary 60 votes on the floor. However, stakeholders anticipate contentious amendments addressing DeFi custody and rewards related to crypto-native stablecoins in retirement accounts.
D’Agostino argues that the GENIUS Act’s success underscores that clear regulatory frameworks can stimulate institutional adoption. Since its implementation, major financial institutions have made inroads into the stablecoin market, allowing other firms to explore branded payment tokens. He believes that the forthcoming market structure legislation will similarly enable businesses outside the financial sector to leverage blockchain technology across their operations.
In addition to supporting institutional engagement, clear market structure is viewed as a means to mitigate regulatory risks for companies at the cutting edge of the crypto landscape. D’Agostino noted that clarity would encourage traditional institutions, wary of unique regulatory uncertainties, to confidently interact with customers through blockchain-based platforms.
While expressing satisfaction over the GENIUS Act’s passage, D’Agostino cautioned against the pressure from traditional banking interests, which continue to propose restrictions on stablecoin yields during ongoing Senate discussions. Coinbase’s chief policy officer recently voiced concerns about the potential impact of yield limitations on the global competitiveness of U.S. dollar-backed stablecoins, especially with China’s plans to make its digital yuan interest-bearing starting in 2026.
Responding to banking concerns regarding yield-bearing stablecoins, D’Agostino clarified that banks currently earn around 4% on reserves held at the Federal Reserve but lack incentives to distribute those returns, while stablecoin platforms aim to provide yield to their users as a core feature. Senator Cynthia Lummis emphasized the urgency for establishing clear regulations, stating that ambiguous rules have driven digital asset firms to operate abroad, and advocated bipartisan support for strong jurisdictional clarity and protections.
Even amidst the challenges posed by government shutdowns, D’Agostino remains confident that competitive pressures from jurisdictions offering regulatory certainty will necessitate congressional action once lawmakers resume their duties.
