Coinbase CEO Brian Armstrong has publicly withdrawn support for a draft cryptocurrency market structure bill from the U.S. Senate Banking Committee, calling it a "dangerous setback" that poses serious risks to the industry. After a two-day review, Armstrong declared that the proposed legislation in its current form is worse than the existing regulatory ambiguity, stating, "We would rather have no law than a bad law."
The CEO's opposition centers on four critical flaws he identified in the draft. First, the bill's language effectively creates a de facto ban on tokenized securities, which could stifle innovation in asset digitization. Second, its compliance requirements are tailored for centralized entities, making it technically impossible for most decentralized finance (DeFi) protocols to operate legally within the United States.
Third, Armstrong criticized the draft for eroding the authority of the Commodity Futures Trading Commission (CFTC) while disproportionately strengthening the role of the Securities and Exchange Commission (SEC), a shift he believes will tip the regulatory balance and stifle innovation. Finally, the bill includes provisions that could eliminate stablecoin reward features, such as interest-bearing accounts, which are a key utility and driver for user adoption of dollar-pegged digital currencies.
While Armstrong acknowledged the bipartisan effort behind the draft and expressed optimism that a more balanced text could be achieved through continued negotiation, his stark critique throws the future of the landmark legislation into immediate doubt. The development highlights the deep tension between the rapidly evolving digital asset sector and cautious lawmakers, occurring against a backdrop of global regulatory competition where jurisdictions like the European Union, the United Kingdom, and Singapore have already established clearer frameworks.
