Coinbase CEO Brian Armstrong has accused main U.S. banks of trying to sabotage President Donald Trump’s pro-crypto agenda, warning that proposed modifications to a Senate market construction invoice may stifle innovation, ban total classes of digital belongings and strip Individuals of the power to earn yield on stablecoins.
In a wide-ranging interview with Fox Enterprise anchor Maria Bartiromo on Mornings With Maria, Armstrong said the most recent draft of laws rising from the Senate Banking Committee represents a “giveaway to the banks” that dangers regulatory overreach and undermines latest bipartisan progress on crypto coverage.
“After reviewing the Senate Banking draft during the last 48 hours, Coinbase sadly can’t help this invoice as written,” Armstrong stated, citing provisions that would effectively ban tokenized securities, impose broad prohibitions on decentralized finance (DeFi), weaken the Commodity Futures Buying and selling Fee (CFTC), and eradicate rewards on stablecoins.
Whereas praising the Senate’s broader efforts — together with work led by Senators Tim Scott and Cynthia Lummis — Armstrong stated the draft text circulated earlier this week raised “harmful” points that might be tougher to repair as soon as the invoice reached the Senate flooring.
Stablecoins on the middle of the crypto battle
On the middle of the dispute is stablecoin rewards. Armstrong argued that latest laws, together with the GENIUS Act signed into regulation below President Trump, explicitly enabled stablecoin issuers to pay yield, a characteristic he described as important to giving Individuals higher returns on their cash.
“The banks are actually coming and attempting to undermine the president’s crypto agenda,” Armstrong stated. “They’re attempting to guard their very own revenue margins, taking cash out of the pockets of hardworking, common Individuals and placing it into the coffers of massive banks hitting document earnings.”
Armstrong contrasted stablecoins — which below the GENIUS Act should be backed 100% by short-term U.S. Treasuries — with conventional fractional-reserve banking, arguing that stablecoins carry much less systemic danger. “There isn’t a fractional reserve with these stablecoins,” he stated. “They shouldn’t be topic to the identical regulation as banks.”
Bartiromo pressed Armstrong on whether or not crypto platforms ought to face the identical regulatory burdens as banks, together with deposit insurance coverage and investor protections.
Armstrong responded that such frameworks exist primarily to handle dangers created by fractional-reserve lending, noting that FDIC insurance coverage solely covers deposits as much as $250,000.
“If clients need to decide in to lending out their funds, they’ll do this,” he stated. “You don’t want a financial institution license to try this. What requires a financial institution license is lending out folks’s cash with out their permission.”
Armstrong additionally pushed again on claims that stablecoins threaten neighborhood banks, calling the argument a “pink herring” superior by giant monetary establishments. He stated there is no such thing as a proof that neighborhood banks are dropping deposits to stablecoins, including that consolidation pushed by massive banks has posed a far better menace for the reason that Dodd-Frank period.
The Coinbase CEO additionally criticized Senate language that might subordinate the CFTC to the Securities and Change Fee (SEC), requiring crypto belongings to move by means of the SEC earlier than doubtlessly falling below CFTC jurisdiction.
“I can’t think about why the Senate Ag Committee would make the CFTC a subsidiary of the SEC,” he stated, pointing to the Home-passed CLARITY Act, which clearly delineates oversight between digital commodities and securities.
Wanting forward, Armstrong stated he stays optimistic that lawmakers can revise the Senate invoice to align with President Trump’s crypto agenda. Nonetheless, he issued a transparent warning: “It’s higher to haven’t any invoice than a nasty invoice.”
“If it prohibits total classes of latest merchandise like tokenized equities, I’d slightly haven’t any invoice,” Armstrong stated. “We’re not going to cement one thing into regulation if it harms peculiar Individuals and bans competitors.”
