Original Title: The Crypto CEO Who's Become Enemy No. 1 on Wall Street
Original Authors: Amrith Ramkumar, Dylan Tokar, Gina Heeb, The Wall Street Journal
Translated by: Peggy, BlockBeats
Editor's Note: When the crypto industry truly enters the core financial domain of bank deposits and payments, the conflict is no longer just a battle of ideas, but a struggle over interests. This article, using Brian Armstrong's direct confrontation with Wall Street as a focal point, reveals the fundamental competition between banks and crypto platforms behind the CLARITY Act. This is not only about whether stablecoin yields are legal, but more importantly, about who will set the rules for the next generation of the financial system.
The following is the original text:
Last week, during the World Economic Forum in Davos, Switzerland, Brian Armstrong, CEO of the largest cryptocurrency company in the U.S., was having coffee with former British Prime Minister Tony Blair, when Jamie Dimon suddenly interrupted.
"You're full of crap," said Jamie Dimon, who has long been skeptical of cryptocurrencies and once called Bitcoin a "fraud," as he pointed his index finger directly at Armstrong's face.
According to informed sources, the core of Dimon's message was simple: stop Armstrong from continuing to lie on television. Just one week earlier, Armstrong had accused banks on multiple business TV programs of trying to undermine legislation aimed at establishing a new regulatory framework for digital assets.
This direct confrontation clearly contradicts the Davos Forum's stated purpose of "promoting cooperation among global leaders."
As the cryptocurrency industry rapidly enters the mainstream U.S. financial system, some heavyweights on Wall Street are beginning to realize that a threat is approaching. Although banks have already accepted crypto assets to some extent—such as helping clients invest in Bitcoin or using digital assets to improve the efficiency of cross-border transfers—they have drawn a clear line when crypto activities encroach on their core territory: consumer deposits.
The bank and Coinbase are directly at odds over a key issue: whether cryptocurrency trading platforms should be allowed to offer users "interest on holdings." These so-called "rewards" typically involve paying users a regular return at a certain rate, such as an annualized 3.5%. Stablecoins are a type of digital asset pegged to real-world currencies like the U.S. dollar.
Brian Moynihan, CEO of Bank of America, and Jamie Dimon, CEO of JPMorgan Chase.
The bank believes that the returns paid to users are essentially no different from the interest on bank accounts. Since the returns offered by banks are much lower—savings account interest rates are typically less than 0.1%—they are concerned that the result will be a large number of consumers shifting their funds into cryptocurrency assets. This outflow of funds, banks say, will weaken the survival of community banks and affect lending to businesses.
Meanwhile, Brian Armstrong and other figures in the crypto industry believe that the free market should be allowed to function: banks can fully compete with stablecoins by raising deposit rates or simply entering the stablecoin business themselves.
This piece of legislation, known as the Clarity Act, could reshape the future of everyday financial services, including bank deposits and electronic payments.
According to informed sources, in the latest round of efforts to reach a compromise, the White House plans to convene a meeting on Monday with banking and cryptocurrency industry groups. David Sacks, the Trump administration's lead on AI and cryptocurrency issues, is expected to attend. Kara Calvert, Coinbase's U.S. policy head, is also among those invited.
Armstrong, who is 43 years old, co-founded Coinbase in 2012 and has played a significant role in promoting legitimacy and mainstream adoption for the cryptocurrency industry. As the leader of a company valued at approximately $55 billion, Armstrong holds considerable influence in industry discussions, particularly in the ongoing debates in Washington.
Just one day before a U.S. Senate committee was set to vote on a version of a bill that could substantially prohibit companies like Coinbase from offering yield to customers—potentially resulting in losses of billions of dollars—Armstrong posted on X, saying, "We would rather have no bill than a bad bill."
Several hours later, the vote was suddenly postponed, much to the surprise of the financial community.
Ron Hammond, Head of Policy and Initiatives at digital asset trading firm Wintermute, said, "It's more like Coinbase versus the banks now, rather than the crypto industry versus the banks."
Armstrong's rebuttal did not end with that X post on January 14. He subsequently reiterated his views on a television program, stating during an interview with Bloomberg that banking lobbyists "are trying to eliminate competitors," and accused banks of "essentially taking customers' deposits to make loans without their permission."
According to insiders, these remarks directly led to a series of awkward confrontations with several bank CEOs at Davos.
"If you want to be a bank, then just become a bank," Brian Moynihan said during a 30-minute meeting with Armstrong last week at the main Davos venue. The meeting appeared superficially cordial but somewhat awkward.
Citigroup CEO Jane Fraser gave Armstrong less than a minute of her time. (Coinbase is a client of both Citigroup and JPMorgan Chase and has business relationships with multiple banks.)
And this "one minute" was even longer than the time given by Wells Fargo CEO Charlie Scharf. When Armstrong approached him, Scharf bluntly said there was "nothing to talk about." At that moment, Scharf's former boss, Dimon, was nearby.
"Bank Alternative"
Armstrong studied economics and computer science at Rice University in Houston and was an early advocate of the concepts of digital currency and blockchain. He read the Bitcoin white paper published in 2008 by someone using the pseudonym Satoshi Nakamoto. While working at Airbnb in 2011, he also experienced significant difficulties when sending money to South America.
These experiences paved the way for the birth of Coinbase. Initially, the company aimed to solve a core problem that plagued cryptocurrency investors: there was no secure place to store digital assets. Subsequently, as some users wanted to do more than just "hold" Bitcoin—they wanted to trade—Coinbase naturally evolved into an exchange.
Coinbase quickly grew from a small apartment in San Francisco (the company's first office) into a major enterprise. By 2017, when another co-founder left, Armstrong had become the undisputed leader of the company.
A former colleague previously told the Wall Street Journal that Armstrong was introverted and sometimes struggled in communicating with employees, and was not particularly skilled at delivering criticism in person. Some former employees felt that his manner was reminiscent of the "Vulcans" from Star Trek, known for their calm and restrained demeanor.
Brian Armstrong, CEO of Coinbase in 2014.
However, Armstrong has never hidden his ambitions for Coinbase. He positioned Coinbase as a U.S. company that would bring cryptocurrency into the mainstream. Today, Coinbase's business scope spans multiple areas, including electronic payments, stock trading, commodities, and prediction markets.
"Fundamentally, we want to be an alternative to banks," he said in a Fox Business program last year. "We want to build a super app that provides a variety of financial services."
As the business expanded, Armstrong invested tens of millions of dollars to build the largest lobbying machine in the industry. After experiencing multiple cycles of booms and busts in the cryptocurrency market, Coinbase went public in April 2021, with its market value briefly reaching a high of $100 billion, and the value of Armstrong's personal stake briefly rose to about $13 billion.
After weathering the industry collapse in 2022 and regulatory crackdowns during the Biden administration in 2023, Armstrong began a strong counteroffensive and gradually found his own voice. Once a founder who preferred to wear headphones, write code in the office, and was somewhat reluctant to speak publicly, he has now become one of the most active advocates for the cryptocurrency industry in Washington. Meanwhile, the U.S. political landscape is undergoing a dramatic shift in its attitude toward cryptocurrencies.
Coinbase has invested approximately $75 million in the 2024 election cycle through a network of super PACs, aiming to counter candidates who are skeptical of cryptocurrency and to build grassroots organizations to gain public support for crypto-related legislation. The super PACs stated on Wednesday that they currently have a funding pool of $193 million.
Trump's victory in 2024 opened a policy window that Armstrong had pursued for a decade. He praised Trump for ushering in the "dawn of a new era for crypto," and before and after Trump's inauguration, he attended a "Crypto Ball" featuring a performance by Snoop Dogg. Now, the executive has been taking off his signature T-shirt and black jacket at least every two months, putting on a suit instead, and heading to Capitol Hill to meet with politicians.
"Coinbase is at the forefront of all crypto-related matters in the United States," said Anthony Scaramucci, founder of SkyBridge Capital and a long-time crypto investor.
Last summer, Trump signed the Genius Act into law, clearing the way for multiple companies to issue stablecoins. This legislation spurred a rapid increase in stablecoin activity. The bill prohibits issuers from directly paying interest to users, but it does not cover third parties such as trading platforms or Coinbase. This "omission" has been viewed by banking groups as a regulatory loophole, and it is precisely the spark that has ignited the current conflict surrounding the Clarity Act.
A Long Legislative Journey
The House of Representatives passed its version of the Clarity Act last year, but advancing it in the Senate is widely seen as more difficult, partly due to significant disagreements over which rules crypto companies should follow. The Senate Agriculture Committee, which oversees provisions related to the Commodity Futures Trading Commission, advanced its own version on Thursday. Legislators will still ultimately need to pass a final version through a full Senate vote and reconcile it with the House version.
According to informed sources, Brian Moynihan's core argument regarding Armstrong is that if crypto companies like Coinbase want to offer services similar to deposits, they should be subject to the same regulatory burdens as banks, in the view of many banks. Regulators such as the Federal Reserve and the Office of the Comptroller of the Currency examine banks' risk profiles, conduct regular inspections of their operations, and impose strict capital requirements for loans and investments.
"The controversy surrounding the 'reward mechanism' is actually an exception within our overall relationship with banks," said Faryar Shirzad, Coinbase's Chief Policy Officer. "We maintain close cooperation with banks and have already announced multiple partnership agreements."
Coinbase has established a lucrative partnership with stablecoin issuer Circle, allowing it to earn a significant revenue share from the popular stablecoin USDC. Through this unique arrangement, Coinbase is able to offer a 3.5% yield to some USDC holders, a rarity in the industry. The company stated that such incentives help attract users and provide consumers with more options in an environment where savings account interest rates are extremely low.
"There's no reason to prohibit paying interest to consumers," Armstrong said in an interview with The Wall Street Journal last year.
On January 15, 2026, Brian Armstrong appears on Capitol Hill.
As the Clarity Act gradually moved toward a congressional vote, banks began fiercely lobbying behind the scenes. According to a government estimate cited by the banks, if the proposed restrictions were lifted, approximately $6.6 trillion in deposits could be "pulled out" from the traditional financial system. The lobbying efforts quickly bore fruit: the nearly 300-page bill draft included a series of provisions and potential amendments, which, in Armstrong's view, amounted to a defeat for the cryptocurrency industry. As a result, Armstrong withdrew his support, and shortly thereafter—within hours—Tim Scott, the Republican chair of the Senate Banking Committee from South Carolina, canceled the scheduled vote.
According to insiders, Armstrong has ideas on how to break the deadlock. He once told Brian Moynihan that a new category of stablecoin issuers could be established: as long as they met stricter regulatory standards, they would be allowed to pay returns to users. This would theoretically enable banks to enter the market under the same regulatory framework as Coinbase.
Other proposals advocate for a general prohibition on revenue payments, but reserve a small number of exceptional use cases for institutions like Coinbase.
No matter what the final solution is, legislative progress almost always requires Armstrong's endorsement.
"The current situation is that everyone believes whether this legislation passes ultimately depends on whether Coinbase nods its head," said Hilary Allen, a law professor at American University, an expert in securities law, and also a skeptic of cryptocurrency. "This is a truly shocking reality."
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