Coinbase CEO Armstrong Says Firm Can't Back Crypto Bill As Is

• Armstrong identified major concerns including a 'de facto ban on tokenized equities,' erosion of CFTC authority, and amendments that would 'kill rewards on stablecoins'
• The bill prohibits crypto companies from paying interest solely for holding stablecoins, though it allows rewards for specific activities like payments or loyalty programs
• Coinbase donated millions to pro-crypto political action committees in 2024 and has been a central stakeholder in bill negotiations, making its opposition potentially decisive for the legislation's future

Coinbase Opposes Senate Crypto Legislation

Coinbase CEO Brian Armstrong announced Wednesday that the cryptocurrency exchange cannot support draft legislation introduced by U.S. senators this week aimed at establishing a regulatory framework for digital assets. Armstrong stated the company "would rather have no bill than a bad bill."

Key Issues with Proposed Legislation:

The bill seeks to define when crypto tokens qualify as securities, commodities, or other assets, and would transfer spot crypto market oversight to the Commodity Futures Trading Commission (CFTC). However, Armstrong cited multiple concerns:

• A de facto ban on tokenized equities
• Erosion of CFTC authority
• Provisions that would "kill rewards on stablecoins"
• Prohibition on crypto companies paying interest solely for holding stablecoins

The legislation does permit rewards for specific activities like payment transactions or loyalty programs.

Market Implications:

Coinbase's opposition carries significant weight. The company donated millions to pro-crypto political action committees in 2024 and has been a key stakeholder in bill negotiations. Without Coinbase's backing, the bill's markup process—scheduled for Thursday at 10 a.m. ET in the Senate Banking Committee—may face uncertainty.

Armstrong emphasized that cryptocurrencies need equal treatment with traditional financial services, though he expressed optimism about reaching "the right outcome with continued effort."

Bottom Line:

This development introduces uncertainty into crypto regulatory efforts as lawmakers prepare to debate amendments. The bill's fate remains unclear, and the standoff highlights ongoing tensions between the industry and regulators over appropriate oversight frameworks. Investors should monitor Thursday's Senate Banking Committee session for potential amendments addressing Coinbase's concerns.