This week, Bitcoin’s upward momentum seemed to stall as the Senate Banking Committee unveiled its “Myth vs. Fact” document regarding the Digital Asset Market Clarity Act of 2025 (H.R. 3633, the Clarity Act). The timing of this announcement has raised eyebrows, especially given the context of ongoing regulatory uncertainty in the cryptocurrency space.
The Clarity Act, having successfully passed both the House Financial Services and Agriculture committees in late 2025, aims to establish a comprehensive federal framework for digital assets in the U.S. It designates the Commodity Futures Trading Commission (CFTC) with primary authority over “digital commodities,” which include non-security tokens such as Bitcoin and Ethereum. Importantly, the bill also maintains the Securities and Exchange Commission (SEC)’s oversight for primary market transactions that still meet the Howey test.
In its January 14, 2026, statement, the Senate Banking Committee portrayed the Clarity Act as a protective and pro-innovation initiative. The committee emphasized that the bill serves to protect Main Street investors, keep capital within the U.S., and safeguard national security. However, a notable dissenting opinion has emerged from Coinbase, a leading cryptocurrency exchange.
Coinbase CEO Brian Armstrong expressed significant reservations about the Clarity Act on social media, highlighting various issues he sees with the bill. Armstrong cited a perceived de facto ban on tokenized equities, provisions that could infringe upon decentralized finance (DeFi) by giving the government excessive access to personal financial records, and an undermining of the CFTC’s authority, which he believes would inhibit innovation. Furthermore, he raised concerns about draft amendments that could eliminate rewards on stablecoins, giving banks a competitive advantage.
On the same day, Coinbase’s Chief Policy Officer Faryar Shirzad discussed these concerns in an interview with CNBC. He emphasized that Coinbase’s primary focus is on consumer interests, showcasing the expansive outreach efforts from the grassroots movement StandWithCrypto, which has garnered 250,000 messages directed at lawmakers expressing consumer concerns regarding stablecoin rewards. Shirzad acknowledged the commendable efforts of legislators but stressed that “the details matter,” as the fate of the bill lies in the hands of the Senate’s Chairman of the Committee on Banking, Housing, and Urban Affairs, Senator Tim Scott.
Senator Scott assured that discussions are ongoing and that input has been gathered from various industry leaders, financial sectors, and political colleagues. He described the bill as a product of extensive bipartisan negotiations designed to establish clear regulations that not only protect consumers but also bolster national security and secure the future of finance in the U.S.
However, the implications for digital asset investors remain uncertain. Many observers have pointed out how the proposed restrictions on stablecoin rewards could disproportionately favor traditional banks. Currently, the average return for staking USDC, a leading USD-backed stablecoin, is roughly 3.5%, a stark contrast to the disappointing returns offered by major banks. With concerns about potential “capital flight” to stablecoins, experts warn that banks may struggle to retain customers who are drawn to higher yields available through crypto.
In light of these developments, the concerns for Coinbase become even more crucial. The exchange has reportedly generated significant revenue—around $300 million in distribution payments—linked to stablecoin rewards, and any changes to this system could lead to a steep decline in income.
On the flip side, the Clarity Act has garnered support from industry players such as Andreessen Horowitz, Ripple, and Kraken, who see the legislation as a pathway to promote growth in the digital asset sector. Ripple’s CEO Brad Garlinghouse actively endorsed the measure, asserting that “clarity beats chaos,” while Circle’s Chief Strategy Officer Dante Disparte and Kraken’s Co-CEO Arjun Sethi similarly expressed their commitment to supporting the bill.
As the regulatory landscape unfolds, one influential figure is David Sacks, the White House AI and Crypto Advisor. As he continues to engage with Senator Scott and other stakeholders, he underscores the administration’s commitment to bipartisan cooperation in advancing crypto market regulations. Sacks’s involvement has raised expectations that the Clarity Act could be pivotal for the future of cryptocurrency in the U.S.
With a possible government shutdown looming and upcoming mid-term elections that could shift the political landscape, stakeholders are keenly watching how these developments will affect market dynamics. Investors in Bitcoin and XRP, as well as global regulators, will be particularly attentive to the legislative progress surrounding this critical bill and its potential consequences for the industry at large.
