Coinbase co-founder and CEO Brian Armstrong said the company cannot support the current market structure draft being prepared by the US Senate Banking Committee. Speaking on Fox Business, he argued that the proposal is tilted toward bank interests, with provisions that come close to a de facto ban on tokenized securities, broad restrictions on DeFi, and the removal of stablecoin rewards.
Armstrong framed the fight in direct terms. He said large US banks are trying to weaken the crypto-friendly policies associated with former President Donald Trump, and warned that the draft could choke innovation, hurt economic growth, and damage the bipartisan alignment that has recently taken shape around crypto issues.
Stablecoin yield rules sit at the center of the dispute
A key part of Armstrong’s criticism focused on the recently enacted GENIUS Act, which he said was signed by Trump and allows stablecoin issuers to offer interest. In his view, that matters because it gives Americans a way to earn returns on savings. He argued that major banks are pressing regulators so those returns remain on bank balance sheets instead of moving into stablecoin products.
He also said stablecoins that are fully backed by short-term US Treasury securities carry far less risk to the financial system than fractional reserve banking. The disagreement, as presented by Armstrong, is not limited to competition between products. It also concerns who controls access to dollar-based returns in digital form.
SEC-CFTC balance becomes another flashpoint
One of Armstrong’s strongest objections targets the draft’s proposal to place the Commodity Futures Trading Commission under the jurisdiction of the Securities and Exchange Commission. Under that model, digital assets would first face SEC oversight. He pointed to the CLARITY Act, which passed the House of Representatives, and said the Senate approach would increase regulatory uncertainty instead of reducing it.
For exchanges and crypto firms, the boundary between securities and commodities oversight can shape listing decisions, disclosure obligations, product design, and expansion plans. Armstrong’s comments show that the industry still resists a framework that starts by viewing digital assets through a securities lens.
New York may add reserve and transparency requirements
The federal debate is not the only pressure point. The New York State Department of Financial Services is reportedly working on added transparency and reserve reporting requirements for stablecoin issuers. Experts cited in the report warned that if state-level measures are not aligned with federal rules, the result could be a fragmented market structure in the United States.
That would leave stablecoin issuers dealing with more than one compliance track at the same time. For businesses built around interstate circulation and onchain settlement, the cost and complexity of meeting those rules could rise quickly.