Coinbase CEO Brian Armstrong said the exchange cannot support the Senate Banking Committee’s latest draft of the CLARITY Act, warning that the bill, as written, would leave the U.S. crypto industry worse off than the current regulatory status quo.
In a post on X, Armstrong cited several concerns, including what he described as a de facto ban on tokenized equities, new restrictions on decentralized finance that could grant the government broad access to users’ financial data, and provisions that weaken the Commodity Futures Trading Commission while expanding the Securities and Exchange Commission’s authority.
“After reviewing the Senate Banking draft text over the last 48hrs, Coinbase unfortunately can’t support the bill as written,” Armstrong posted.
He also criticized draft amendments that would eliminate rewards on stablecoins, arguing they would allow banks to suppress emerging competitors.
“We’d rather have no bill than a bad bill,” Armstrong said on X, adding that Coinbase would continue pushing for a framework that treats crypto on a level playing field with traditional financial services.
The comments come a day before the Senate Banking Committee is expected to mark up the CLARITY Act on Thursday, January 15.
The legislation is trying to clarify U.S. digital asset market structure by defining categories such as digital commodities, investment contracts, and payment stablecoins, while dividing oversight between the SEC and CFTC.
Coinbase’ issues with stablecoin rewards
Stablecoin rewards have emerged as a flashpoint in negotiations. Coinbase had reportedly warned lawmakers it may withdraw support for the bill if it restricts yield programs tied to stablecoins like USD Coin.
Coinbase shares in interest income generated from USDC reserves and uses part of that revenue to offer incentives to users, including rewards of roughly 3.5% for Coinbase One customers.
Stablecoin-related revenue may have reached $1.3 billion in 2025, making the issue central to Coinbase’s business model.
Banking groups argue that yield-bearing stablecoins could draw deposits away from traditional banks, while crypto firms counter that banning rewards would stifle innovation and push users toward offshore platforms.
“I’m actually quite optimistic that we will get to the right outcome with continued effort,” Armstrong later posted on X. “We will keep showing up and working with everyone to get there.”
Michael Saylor, executive chairman of Strategy, retweeted Armstrong’s post, showing his own support with the decision.