Coinbase CEO Urges Congress to Pass Stablecoin Regulations by August

On May 6, 2025, Coinbase CEO Brian Armstrong called on Congress to expedite the passage of stablecoin and broader crypto market regulations before the August recess. Armstrong emphasized the urgency of the situation, highlighting that the U.S. risks losing its dominance in the stablecoin sector to offshore issuers if clear rules are not established soon.

Armstrong specifically urged the Senate to advance Senator Bill Hagerty’s Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act. He also encouraged the House to refine and pass a revised version of the Financial Innovation and Technology for the 21st Century Act (FIT21). These twin measures aim to provide the first federal framework for the $240 billion stablecoin sector, which is currently dominated by Tether’s USDT and Circle’s USD Coin.

The GENIUS Act proposes reserve, audit, and licensing standards, while the revised House draft of FIT21 clarifies the jurisdiction of the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) over digital assets, setting clear rules for cryptocurrencies. Although lawmakers rejected the proposal in May 2024, it was recently revived with a market-structure discussion draft.

Despite these efforts, both bills face significant hurdles. The GENIUS bill requires 60 Senate votes, and nine Democrats have expressed opposition over perceived gaps in anti-money-laundering and national security safeguards. Armstrong, however, framed this moment as a narrow window, echoing earlier predictions from lawmakers and industry advocates who see 2025 as the outer deadline for clear rules.

The White House is tracking two separate proposals: the STABLE Act and the GENIUS Act. While the STABLE Act cleared the House Financial Services Committee on a 32-17 vote last month, the GENIUS proposal, viewed as more industry-friendly, has progressed further. Analysts noted that a compliance-focused exchange such as Coinbase would gain from firm rules that could channel institutional demand toward regulated platforms.

Congressional action will determine how U.S. policies on dollar-backed tokens balance consumer safeguards against innovation and compete with other financial centers already licensing stablecoin issuers. Lawmakers now face a choice: break the long stalemate or watch the fast-growing market evolve elsewhere.

In an open letter to the Office of Government Ethics, a group of Senators pressed for clarity on President Trump’s crypto venture, expressing concerns that foreign actors could use the memecoin to gain influence without public disclosure. The White House has not explained how the president’s crypto holdings remain separate from policy decisions, fueling further concerns.

These developments follow news that Abu Dhabi’s state-backed MGX will use USD1 to fund a $2 billion investment in Binance. World Liberty Financial, the Trump family-linked venture, issues this stablecoin. Backed one-to-one by US Treasuries and cash equivalents, USD1 is intended to offer transparency and regulatory compliance.

Tether’s USDT commands a 75% share of the crypto market with a market cap of $149 billion and a $1 billion operating profit in Q1 2025. Meanwhile, the Trump-linked USD1 commands a market cap of $2.1 billion.

While USD1 attempts to carve out its niche in the political sphere, the broader stablecoin ecosystem continues to evolve rapidly across financial markets. For example, Stripe has begun testing a U.S.-dollar stablecoin payout tool, inviting exporters and SaaS firms outside the US to participate in the pilot. CEO Patrick Collison says its product, built on Bridge rails, will let platforms settle instantly in tokenized dollars. Stripe still handles compliance and conversion behind the scenes.

In a parallel development, First Abu Dhabi Bank (FAB) teamed with sovereign investors ADQ and IHC to unveil a dirham-backed stablecoin on the ADI blockchain. Subject to central bank sign-off, the token seeks to give Gulf corporations a regulated on-chain cash option, closing the FX loop for oil trade and cross-border e-commerce across MENA.

The momentum spilled into card networks as Visa and its newly acquired Bridge rolled out stablecoin-linked cards across six Latin American markets. Similarly, Mastercard joined forces with OKX and Nuvei to let users spend USDC and other tokens at millions of merchants.