Armstrong Lashes Out at Senate Banking Committee Bill
Coinbase CEO Brian Armstrong, in a wide-ranging interview with Fox Business anchor Maria Bartiromo on Mornings With Maria, accused major U.S. banks of actively trying to undermine President Donald Trump's pro-crypto agenda. He described the latest draft legislation emerging from the Senate Banking Committee as a 'giveaway to the banks' that risks overregulation and erodes recent bipartisan progress on crypto policy.
'After reviewing the Senate Banking draft over the last 48 hours, Coinbase unfortunately can't support this bill as written,' Armstrong said, citing provisions that would effectively ban tokenized securities, impose broad prohibitions on decentralized finance (DeFi), weaken the Commodity Futures Trading Commission (CFTC), and eliminate rewards on stablecoins. While praising the Senate's broader efforts — including work led by Senators Tim Scott and Cynthia Lummis — Armstrong warned that the draft text raised 'dangerous' issues that would be harder to fix once the bill reached the Senate floor.
The Central Dispute: Stablecoin Rewards
At the heart of the conflict is stablecoin rewards. Armstrong argued that recent legislation, including the GENIUS Act signed into law under President Trump, explicitly enabled stablecoin issuers to pay yield — a feature he described as critical to giving Americans better returns on their money. However, the Senate draft seeks to ban such rewards, a move Armstrong says is driven by banks protecting their profit margins. 'The banks are really coming and trying to undermine the president's crypto agenda,' he said. 'They're trying to protect their own profit margins, taking money out of the pockets of hardworking, average Americans and putting it into the coffers of big banks hitting record profits.'
Armstrong contrasted stablecoins — which under the GENIUS Act must be backed 100% by short-term U.S. Treasuries — with traditional fractional-reserve banking, arguing that stablecoins carry less systemic risk. 'There is no fractional reserve with these stablecoins,' he said. 'They should not be subject to the same regulation as banks.' When pressed by Bartiromo on whether crypto platforms should face the same regulatory burdens as banks, including deposit insurance and investor protections, Armstrong noted that such frameworks exist primarily to manage risks from fractional-reserve lending and that FDIC insurance only covers deposits up to $250,000. 'If customers want to opt in to lending out their funds, they can do that,' he said. 'You don't need a bank license to do that. What requires a bank license is lending out people's money without their permission.'
Armstrong also pushed back on claims that stablecoins threaten community banks, calling the argument a 'red herring' advanced by large financial institutions. He said there is no evidence that community banks are losing deposits to stablecoins, adding that consolidation driven by big banks has posed a far greater threat since the Dodd-Frank era.
Power Struggle: CFTC vs. SEC
Armstrong strongly criticized Senate language that would subordinate the CFTC to the Securities and Exchange Commission (SEC), requiring crypto assets to pass through the SEC before potentially falling under CFTC jurisdiction. 'I can't imagine why the Senate Ag Committee would make the CFTC a subsidiary of the SEC,' he said, pointing to the House-passed CLARITY Act, which clearly delineates oversight between digital commodities and securities. This provision, if enacted, would create an extra layer of regulatory complexity and delay, potentially stifling innovation.
Armstrong's Warning and Outlook
Looking ahead, Armstrong said he remains optimistic that lawmakers can revise the Senate bill to align with President Trump's crypto agenda. However, he issued a clear warning: 'It's better to have no bill than a bad bill.' He elaborated: 'If it prohibits entire categories of new products like tokenized equities, I'd rather have no bill. We're not going to cement something into law if it harms ordinary Americans and bans competition.' He vowed to continue working with lawmakers to fix the problematic provisions.