Coinbase has stepped into the spotlight of the US crypto regulation debate after its CEO pulled support for a major Senate bill, arguing that the proposed rules favor traditional banks and hurt competition in the digital asset market.
Coinbase CEO Brian Armstrong, explained his decision during an interview on a television channel, saying the proposed legislation reflects regulatory capture by traditional banks. “It just felt deeply unfair to me that one industry would come in and get to do regulatory capture to ban their competition,” Armstrong said. “They should have to compete on the level-playing field, and I genuinely believe that.” He added that many in the crypto sector share these concerns and that he felt a responsibility to speak for customers who could face worse outcomes under the bill.
Armstrong clarified that he did not take a position on whether the Senate hearing or markup should proceed. However, he stressed the importance of addressing the bill’s impact on everyday users. “I declined to opine on the exact — whether the hearing, the markup should happen or not but I did feel like I had to speak up on behalf of our customers and all Americans here.” His move to pull Coinbase’s backing from the legislation drew attention across Capitol Hill, given the company’s influence in the digital asset space.
The core disagreement centres on whether stablecoin holders should be allowed to receive reward payments, an issue dividing banks and crypto firms. Despite this clash, Armstrong acknowledged that some banks are taking a more constructive stance on digital assets. “Many of these banks are actually very smart,” he said. “The commercial side of the bank is leaning into crypto. They’re actually doing deals with Coinbase. We’re powering a lot of crypto and stablecoin infrastructure for them on the commercial side.” He criticized bank lobbying efforts in Washington as zero sum and aimed at limiting competition but expressed confidence that lawmakers could still resolve the remaining issues. “So, I suspect, like many things, if we get the principles in the room, we can actually get this figured out and make a good deal.”
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