Coinbase CEO and co-founder Brian Armstrong said on Jan. 14 that the largest U.S. cryptocurrency exchange cannot support the Senate Banking Committee’s draft crypto market structure bill “as written,” warning it would be worse than leaving the industry without new legislation.
The bill is meant to clarify which federal agency oversees different parts of the crypto industry. This includes how authority would be split between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), as well as the rules crypto exchanges, brokers, and related firms would need to follow.
In a post on X, Armstrong said Coinbase reviewed the draft text over the past 48 hours and identified “too many issues” to back the bill in its current form. He argued the proposal includes what he called a “de facto ban” on tokenized equities and restrictions on decentralized finance (DeFi) that could give the government “unlimited access” to users’ financial records.
Armstrong also said the draft would erode the CFTC’s authority, which he claimed would stifle innovation and make the agency “subservient” to the SEC. “We’d rather have no bill than a bad bill. Hopefully we can all get to a better draft,” Armstrong said.
The comments come after the Senate Agriculture Committee announced on Jan. 13 that it had delayed its crypto market structure bill. It now plans to release the text on Jan. 21 and hold a markup hearing on Jan. 27. The Senate Banking Committee is still expected to move ahead with its markup tomorrow.
Crypto and legal experts told The Defiant earlier this week that several issues are expected to be debated during the hearing, including the hot topic of how yield-bearing stablecoins should be treated.
“Stablecoins that pay interest could be eliminated if Congress closes the current loophole preventing them from doing so,” Maghnus Mareneck, CEO and co-founder of Cosmos Labs, told The Defiant. “Crypto exchanges might be less favored in legislation over banks to operate, and privacy protocols will face more pressure with increased tracking activity.”