Coinbase Thwarts Crypto Legislation, Sparking Regulatory Fractures and Global Risks

The U.S. crypto industry’s bid for regulatory certainty has stalled as Coinbase’s last-minute objections exposed deep fractures in the industry’s unified front. The Senate Banking Committee postponed a vote on the Digital Asset Market Clarity Act after Coinbase CEO Brian Armstrong rejected the bill 'in its current form.'

Brian Armstrong stated:

'We cannot support the legislation in its current form.'

The bill sought to clarify whether crypto tokens are securities or commodities and which agency—SEC or CFTC—holds oversight. Coinbase cited provisions that would 'kill rewards on stablecoins' and 'ban' tokenized equities as key objections.

Citron Research argued:

'Coinbase wants the benefits of CLARITY without the competition it would create.'

Competing firms like a16z, Kraken, and Ripple endorsed the bill. Chris Dixon said:

'It’s not perfect, and changes are needed before it becomes law. But now is the time to move the CLARITY Act forward.'

Traditional banks and credit unions warned the bill’s stablecoin reward provisions could siphon $6.6 trillion in deposits, per a Treasury Department estimate. The House passed its version (H.R. 3633) in July 2025, but it remains stalled in the Senate.

Arjun Sethi of Kraken warned:

'If US exchanges cannot list and operate across the same breadth of products... they will compete at a structural disadvantage.'

The bill’s fate now hinges on resolving conflicts over stablecoin yields and SEC/CFTC jurisdiction.

⚠️ LEGAL DISCLAIMER: This article is for informational purposes only and does not constitute financial or investment advice.

Look, the stablecoin yield provisions in the CLARITY Act aren’t just technical details—they’re a battleground between crypto innovation and traditional banking’s entrenched interests. If Coinbase’s objections force a rewrite, the resulting compromise could either open new financial channels or lock them down permanently.