US Crypto Firms Double Down as Regulatory Debate Intensifies

Coinbase Global Inc's CEO Brian Armstrong has pulled support for a major Senate crypto regulation bill, citing significant issues with its current form. The bill, which aims to establish a clear regulatory framework for digital assets, faces uncertainty after Coinbase's withdrawal.

The bill assigns oversight of spot crypto markets to the Commodity Futures Trading Commission (CFTC) and clarifies when tokens are classified as securities or commodities. However, Coinbase raised concerns about provisions that would limit tokenized equities, weaken the CFTC's role, and impact stablecoin rewards, which are core to its business model.

In response, the Senate Banking Committee postponed its planned markup session to allow further negotiations with industry stakeholders. Chairman Tim Scott emphasized the need for a balanced approach that addresses industry concerns while promoting regulatory clarity.

Why Did This Happen?

Coinbase's public opposition to the bill comes after the Senate Banking Committee released an amended draft of the CLARITY Act. The bill's provisions, particularly those related to stablecoin rewards, have drawn strong criticism from crypto firms. Coinbase has long supported stablecoin-based rewards for users, mirroring traditional savings account structures.

The Senate Republicans' fact sheets on the CLARITY Act highlight consumer protection, national security, and clear regulatory boundaries for digital assets. However, Coinbase and others argue that some provisions could create unintended consequences, including limiting innovation and pushing activity offshore.

How Did Markets Respond?

The regulatory uncertainty has already created ripples in the crypto market. JPMorgan analysts noted that while institutional flows into crypto were strong in 2025, further adoption may depend on the clarity provided by U.S. regulation. The firm expects inflows to rise again in 2026, particularly with the potential passage of the Clarity Act.

Meanwhile, ZKsync, a leading layer-2 network, outlined a 2026 roadmap focused on privacy, control, and institutional adoption. The company emphasized that privacy is a core requirement for enterprise-grade blockchain infrastructure, moving away from experimental models toward real-world deployment.

What Are Analysts Watching Next?

The next steps for the Senate Banking Committee remain in question as lawmakers balance industry concerns with regulatory goals. Senator Cynthia Lummis has criticized the industry's resistance to the bill, suggesting that crypto firms are unprepared to operate under a more structured regulatory environment.

In parallel, the UK's Financial Conduct Authority (FCA) announced that crypto firms must apply for authorisation beginning in September 2026, with the new regime set to take effect by October 2027. The FCA is requiring compliance with governance, operational resilience, and financial crime controls as part of its new regulatory approach.

The evolving global regulatory landscape, including the U.S. and UK approaches, is shaping the trajectory of crypto adoption in 2026. Nimofast Group, a Brazilian energy and logistics conglomerate, announced plans to tokenize $100 billion in energy commodities using blockchain technology, underscoring the growing intersection of traditional and digital finance.