In a recent interview on Fox Business, Coinbase CEO Brian Armstrong expressed serious concerns about the latest draft of a Senate market structure bill, suggesting it threatens to undermine President Donald Trump’s pro-crypto initiatives. Armstrong accused major U.S. banks of attempting to derail the administration’s crypto agenda by pushing for regulatory changes in the proposed legislation that may hinder innovation and eliminate essential benefits like yield on stablecoins.
Armstrong claimed that the changes being discussed in the Senate Banking Committee could effectively ban tokenized securities and impose broad restrictions on decentralized finance (DeFi). He described these alterations as a “giveaway to the banks,” warning that they risk regulatory overreach and could jeopardize the recent bipartisan progress made in the realm of cryptocurrency policy.
“We can’t support this bill as written,” Armstrong stated, as he reviewed the Senate’s draft in detail. He highlighted provisions that would weaken the Commodity Futures Trading Commission (CFTC) and eliminate rewards associated with stablecoins—potentially stripping away Americans’ opportunities to earn competitive returns on their investments.
A significant point of contention for Armstrong is the issue of stablecoin rewards. He noted that recent legislation, such as the GENIUS Act, has explicitly enabled stablecoin issuers to provide yield payments, a feature he insists is vital for helping everyday Americans maximize their financial returns. He accused banks of lobbying against stablecoins to protect their profit margins, claiming this undermines the financial well-being of hardworking Americans.
Armstrong contrasted stablecoins with traditional banking practices, specifically calling out the dangers of fractional-reserve banking. He insisted that the structure of stablecoins, which must be fully backed by short-term U.S. Treasuries, poses significantly less systemic risk and should not be subjected to the same stringent regulations that apply to traditional banks.
When pressed about whether cryptocurrency platforms should face similar regulatory requirements as banks, such as deposit insurance, Armstrong asserted that these frameworks primarily exist to address the risks associated with fractional-reserve lending. He argued that individuals should have the right to opt into lending out their funds without requiring a bank license, emphasizing the importance of consumer choice.
Also, Armstrong challenged claims that stablecoins pose a threat to community banks, describing such concerns as a “red herring” propagated by larger financial institutions. He pointed out that there is no substantiated evidence indicating that community banks are losing deposits to stablecoins, and he alluded to the more significant risk posed by bank consolidation since the Dodd-Frank Act.
In his critique of the Senate bill, Armstrong objected to language that would place the CFTC under the jurisdiction of the Securities and Exchange Commission (SEC), arguing against the idea that the CFTC should become a subsidiary of the SEC. He referred to a separate piece of legislation, the House-passed CLARITY Act, which clearly delineates oversight responsibilities for digital commodities and securities.
Looking ahead, while Armstrong remains hopeful that lawmakers can amend the Senate bill to better align with the objectives outlined in Trump’s crypto agenda, he made it clear that a poorly constructed bill could do more harm than good. “It’s better to have no bill than a bad bill,” he cautioned, asserting that legislation that hampers innovation or bans emerging products like tokenized equities isn’t conducive to the interests of ordinary Americans or competitive markets.
