Coinbase CEO Accuses Banks of Undermining Crypto Policy Agenda

Source: CryptoNewsNet Original Title: Coinbase CEO Brian Armstrong Accuses Banks of Undermining Trump’s Crypto Agenda  Original Link: Coinbase CEO Brian Armstrong has accused major U.S. banks of attempting to sabotage the pro-crypto agenda, warning that proposed changes to a Senate market structure bill could stifle innovation, ban entire categories of digital assets and strip Americans of the ability to earn yield on stablecoins.

Armstrong said the latest draft of legislation emerging from the Senate Banking Committee represents a “giveaway to the banks” that risks regulatory overreach and undermines recent bipartisan progress on crypto policy.

“After reviewing the Senate Banking draft over the last 48 hours, Coinbase unfortunately can’t support this bill as written,” Armstrong said, citing provisions 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 praising the Senate’s broader efforts, Armstrong said the draft text circulated earlier this week raised “dangerous” issues that would be harder to fix once the bill reached the Senate floor.

Stablecoins at the center of the crypto conflict

At the center of the dispute is stablecoin rewards. Armstrong argued that recent legislation explicitly enabled stablecoin issuers to pay yield, a feature he described as critical to giving Americans better returns on their money.

“The banks are really coming and trying to undermine the crypto agenda,” Armstrong said. “They’re trying to protect their own profit margins, taking money out of the pockets of hardworking, average Americans and putting it into the coffers of big banks hitting record profits.”

Armstrong contrasted stablecoins — which must be backed 100% by short-term U.S. Treasuries — with traditional fractional-reserve banking, arguing that stablecoins carry less systemic risk. “There is no fractional reserve with these stablecoins,” he said. “They should not be subject to the same regulation as banks.”

Armstrong responded that regulatory frameworks exist primarily to manage risks created by fractional-reserve lending, noting that deposit insurance only covers deposits up to $250,000.

“If customers want to opt in to lending out their funds, they can do that,” he said. “You don’t need a bank license to do that. What requires a bank license is lending out people’s money without their permission.”

Armstrong also pushed back on claims that stablecoins threaten community banks, calling the argument a “red herring” advanced by large financial institutions. He said there is no evidence that community banks are losing deposits to stablecoins, adding that consolidation driven by big banks has posed a far greater threat.

The CEO also criticized Senate language that would subordinate the CFTC to the Securities and Exchange Commission (SEC), requiring crypto assets to pass through the SEC before potentially falling under CFTC jurisdiction.

“I can’t imagine why the Senate Ag Committee would make the CFTC a subsidiary of the SEC,” he said, pointing to the House-passed CLARITY Act, which clearly delineates oversight between digital commodities and securities.

Looking ahead, Armstrong said he remains optimistic that lawmakers can revise the Senate bill. However, he issued a clear warning: “It’s better to have no bill than a bad bill.”

“If it prohibits entire categories of new products like tokenized equities, I’d rather have no bill,” Armstrong said. “We’re not going to cement something into law if it harms ordinary Americans and bans competition.”