Coinbase CEO Slams Crypto Infrastructure Legislation: 'Can't Support the Bill'

Coinbase Global Inc. has withdrawn support for the latest version of the crypto market-structure bill expected to undergo markup in the Senate Banking Committee on Thursday. CEO Brian Armstrong cited significant concerns with the bill’s provisions.

Armstrong expressed his position via X, stating that the bill is materially worse than the current status quo. He emphasized that Coinbase would rather have no legislation than a flawed one.

The bill aims to establish clear legal parameters for digital assets, including the regulatory split between the SEC and CFTC, and rules for tokenized equities, DeFi, and stablecoin rewards. However, Coinbase's withdrawal of support highlights the complexity and contentious nature of the legislation.

Why the Move Happened

Coinbase's decision is rooted in several problematic elements of the bill. Armstrong specifically pointed to what he described as a de facto ban on tokenized equities and restrictions on DeFi, which he claims could erode the CFTC's authority.

The bill's restrictions on stablecoin rewards are another major concern for Coinbase. Armstrong warned that these provisions could stifle innovation and reduce the competitiveness of crypto platforms against traditional financial institutions.

How the Industry Might Respond

The withdrawal of Coinbase's support raises questions about the bill's future. With one of the largest crypto exchanges no longer backing it, the legislation may face increased scrutiny.

Other industry players are also watching closely. The bill's treatment of DeFi and stablecoin rewards has already drawn criticism from multiple crypto advocates. Some argue it creates unnecessary regulatory burdens while others see it as a necessary step to prevent financial instability according to Forbes analysis.

What Analysts Are Watching

Analysts are assessing how this development might affect the broader crypto market. The bill's potential to delay or reduce stablecoin usage could impact Coinbase's revenue, especially since stablecoin-related income has become a significant contributor to its bottom line.

Bloomberg Intelligence analyst Nathan Dean has noted that the lack of bipartisan support could lower the chances of its passage by mid-2026.

The final version of the bill will depend heavily on negotiations between the Senate Banking Committee and the crypto industry. If key provisions remain unchanged, it is possible that other major crypto firms may reconsider their positions.

The upcoming markup session will test the resilience of the bill's sponsors, particularly in light of Coinbase's public opposition. The outcome could shape the regulatory landscape for digital assets for years to come.