Coinbase CEO Brian Armstrong has voiced strong opposition to a proposed Senate market structure bill, accusing major U.S. banks of orchestrating changes to undermine President Donald Trump’s pro-crypto agenda. In an interview with Fox Business anchor Maria Bartiromo, Armstrong warned that the latest draft legislation from the Senate Banking Committee is a "giveaway to the banks" that threatens to stifle innovation, prohibit entire categories of digital assets, and strip Americans of the ability to earn yield on stablecoins.

Armstrong stated that after reviewing the draft, Coinbase cannot support the bill as currently written. He highlighted several problematic provisions, including those that would effectively ban tokenized securities, impose broad prohibitions on decentralized finance (DeFi), weaken the Commodity Futures Trading Commission (CFTC), and eliminate rewards on stablecoins. While acknowledging the Senate's broader efforts and commending work by Senators Tim Scott and Cynthia Lummis, Armstrong cautioned that the circulated draft contained "dangerous" issues that would be difficult to rectify once the bill reached the Senate floor.

Central to the controversy are stablecoin rewards, which Armstrong argues were explicitly enabled by recent legislation, such as the GENIUS Act signed into law under President Trump. He described yield as crucial for offering Americans better returns on their money, asserting that banks are actively trying to safeguard their profit margins at the expense of average Americans. Armstrong drew a clear distinction between stablecoins, which the GENIUS Act mandates must be 100% backed by short-term U.S. Treasuries, and traditional fractional-reserve banking. He argued that stablecoins carry less systemic risk and therefore should not be subjected to the same regulatory frameworks as banks.

When questioned about whether crypto platforms should face the same regulatory burdens as banks, including deposit insurance and investor protections, Armstrong explained that such frameworks primarily exist to manage risks inherent in fractional-reserve lending. He pointed out that FDIC insurance only covers deposits up to $250,000, and stated that users opting to lend their funds do not require a bank license, unlike lending out money without permission. Armstrong also dismissed claims that stablecoins pose a threat to community banks, calling it a "red herring" propagated by large financial institutions. He contended that there is no evidence of community banks losing deposits to stablecoins, emphasizing that consolidation driven by big banks since the Dodd-Frank era has been a far greater threat.

Furthermore, Armstrong criticized Senate language that would subordinate the CFTC to the Securities and Exchange Commission (SEC), requiring crypto assets to first pass through the SEC before potentially falling under CFTC jurisdiction. He contrasted this with the House-passed CLARITY Act, which provides a clear delineation of oversight between digital commodities and securities. Despite these significant concerns, Armstrong remains optimistic that lawmakers can revise the Senate bill to align with President Trump’s crypto agenda. However, he issued a stark warning: "It’s better to have no bill than a bad bill." He reiterated that if the bill prohibits entire categories of new products like tokenized equities, he would prefer no legislation, refusing to cement a law that harms ordinary Americans and bans competition.