Coinbase Flexes Washington Muscle: CEO Pulls Support from Key Crypto Bill Amid Banking Clash
Washington, D.C. – Coinbase, the largest U.S. cryptocurrency exchange, has thrown a wrench into long-awaited crypto legislation by withdrawing its support, escalating tensions with big banks and highlighting the company’s growing influence in the nation’s capital.
CEO Brian Armstrong publicly declared opposition to a bipartisan Senate bill aimed at clarifying crypto market structure, stating on X that “We’d rather have no bill than a bad bill.” His stance centers on disputes over stablecoin yields, where banks are accused of lobbying to block crypto firms from offering rewards to holders, akin to credit card perks.[1][2]
Senate Bill on Knife’s Edge
The legislation, a priority for the crypto industry, seeks to divide supervisory roles between federal agencies like the SEC and CFTC, resolving classification issues that sparked lawsuits in prior administrations.[1] As the Senate Banking Committee gears up for debate, the bill faces hurdles including postponed votes due to industry pushback.[2]
A compromise in the Clarity Act proposes allowing crypto companies to offer yields on stablecoins, but Armstrong’s critique suggests Coinbase wants stronger protections against banking interference.[1] “It just felt deeply unfair… that one industry [banks] would come in and get to do regulatory capture to ban their competition,” Armstrong told FOX Business, emphasizing the need for a level playing field.[2]
Banking Lobby vs. Crypto Giants
The core dispute revolves around stablecoin rewards. Crypto advocates argue banks view these as zero-sum threats, deploying lobbyists to D.C. to stifle rivals.[2] Armstrong expressed optimism that “if we get the principles in the room, we can actually get this figured out.”[2]
Recent shifts in the bill, including DeFi regulations, token listing oversight by the SEC, and stablecoin provisions, have drawn criticism from lobbyists who say it has “lurched to the left” for bipartisanship.[1] Coinbase, with its deep pockets and vocal presence, wields significant sway—its opposition sent ripples through Capitol Hill.[2]
Democrats’ Ethics Concerns Loom
Complicating matters, Democrats like Sen. Ruben Gallego (D-Ariz.) have flagged ethics provisions as a “red line,” amid worries over White House conflicts of interest.[1] A letter from nonprofit watchdogs to Sens. Tim Scott and Elizabeth Warren decries missing conflict-of-interest safeguards.[1]
Republicans hold an edge in committee, but losing Democratic support could stall the bill indefinitely. Meanwhile, ongoing SEC cases against Coinbase and others like Kraken underscore regulatory flux; the SEC dismissed its Coinbase suit in February 2025 pending Crypto Task Force work.[3]
“Much of the industry shares Coinbase’s concerns… I felt an obligation to stand up for customers.”
– Brian Armstrong, Coinbase CEO[2]
Coinbase’s Rising Power in D.C.
Coinbase’s pivot underscores its evolution from startup to Washington heavyweight. Once battered by SEC lawsuits—charged in 2023 for operating unregistered exchanges and staking services—the firm now shapes policy debates.[3] Armstrong’s public broadsides position Coinbase as defender of innovation against entrenched finance.
The banking lobby’s pushback reflects broader industry fears: crypto’s rise challenges traditional yields and deposits. Stablecoins, pegged to the dollar, could siphon billions if rewarded competitively.
Path Forward Uncertain
With the bill in limbo, stakeholders eye negotiations. A bipartisan senator group floats compromises, but Coinbase’s hard line demands revisions.[1] Armstrong remains hopeful for a “better draft,” signaling room for deal-making.
Crypto’s quest for regulatory clarity hangs in balance. Passage could unlock mainstream adoption; failure risks prolonged uncertainty. As Coinbase asserts power, Washington watches a high-stakes showdown between old guard banks and digital disruptors.