WASHINGTON, Jan 14, 2026, 19:43 EST
- Coinbase CEO Brian Armstrong stated the company cannot back the newest Senate market-structure draft
- The Senate Banking Committee will hold a markup on the CLARITY Act on Jan. 15
- Stablecoin “rewards” and the rift between the SEC and CFTC are becoming clear fault lines
Coinbase CEO Brian Armstrong withdrew the crypto exchange’s backing for the Senate’s newest market-structure bill draft late Wednesday, citing “too many issues” just before a crucial committee markup. 1
The move comes as lawmakers rush to advance a long-delayed overhaul of U.S. crypto regulations, following years of disputes over which agency should oversee most of the sector. With the Senate Banking Committee set to convene Thursday, there’s limited time left to resolve lingering concerns.
The battle has gained urgency as the bill aims to halt what companies call rule-by-enforcement. But it’s also shaping up as a stand-off between banks and crypto firms over whether stablecoins should be treated like deposits. These dollar-pegged tokens are widely used for trading and payments, with many platforms offering “rewards” that mimic interest.
Armstrong criticized the draft for giving the Securities and Exchange Commission too much control, pointing to what he called a “defacto ban on tokenised equities” and “DeFi prohibitions,” according to DL News. DeFi, or decentralized finance, enables users to trade or borrow without relying on a central intermediary. The report noted mixed responses from the industry: Ripple CEO Brad Garlinghouse described the bill as “a massive step forward,” but Galaxy’s research chief Alex Thorn cautioned it represented a significant increase in financial surveillance. 2
The bill, introduced Monday, aims to stop crypto companies from paying interest just for holding a stablecoin. However, it would still allow rewards linked to actions like making a payment or joining a loyalty program, Reuters reported. Bank lobbyists argue Congress needs to close what they see as a loophole that could drain deposits from insured banks. On the other hand, crypto firms warn such restrictions would hamper competition. The proposal remains under review, with possible amendments as senators weigh in. Meanwhile, a separate draft is being developed in the Senate Agriculture Committee. 3
The Senate Banking Committee has scheduled an executive session for Thursday, Jan. 15, at 10:00 a.m. in the Dirksen Senate Office Building. 4
On Tuesday, Blockchain Association CEO Summer Mersinger accused the “Big Banks” of mounting a “relentless pressure campaign” and warned that calls to scrap stablecoin rewards would “choke off consumer choice.” 5
Companies are scrambling to develop payments infrastructure centered on stablecoins. Polygon made waves this week by acquiring crypto payments company Coinme and infrastructure provider Sequence in transactions topping $250 million. The goal: to boost stablecoin-based transactions. 6
Shares of Coinbase rose roughly 1.3%, closing near $255.86 in after-hours trading. 7
