Efforts to establish a comprehensive regulatory framework for cryptocurrencies in the United States have hit a new obstacle after Coinbase Global Inc. CEO Brian Armstrong publicly opposed a major crypto bill currently under review in the US Senate.
Speaking on Wednesday, Armstrong said the leading US cryptocurrency exchange cannot support the proposed legislation in its current form, arguing that it contains significant flaws and could leave the industry worse off than under the existing regulatory environment.
His remarks come at a critical moment, as the bill—introduced earlier this week—heads toward review by the Senate Banking Committee. Given Coinbase’s influence in shaping US crypto policy, Armstrong’s opposition threatens to complicate the bill’s legislative path.
The proposed legislation seeks to establish a long-awaited regulatory framework for digital assets in the United States. A key objective is to clarify when a digital token should be classified as a security and when it should be treated as a commodity, addressing a longstanding source of uncertainty for crypto companies and investors.
Under the draft bill, oversight of the spot cryptocurrency market would largely be assigned to the Commodity Futures Trading Commission (CFTC), significantly expanding the agency’s role in regulating digital assets.
Lawmakers backing the proposal argue that clearer rules would encourage innovation, enhance investor protection, and reduce regulatory ambiguity that has driven some crypto firms to consider operating outside the US.
Despite acknowledging the need for clearer rules, Armstrong said the bill, as written, includes “too many problems” and risks creating a regulatory framework that is more restrictive and less workable than the status quo.
In comments shared with lawmakers and industry stakeholders, he warned that poorly designed legislation could stifle innovation and undermine the competitiveness of the US crypto industry.
“We would rather have no law than a bad law,” Armstrong said in a statement, while emphasizing that Coinbase remains open to continued negotiations and improvements to the draft.
Armstrong highlighted several provisions he believes are particularly harmful to the industry.
First, he argued that the bill’s language could effectively ban tokenized stocks, a growing area of interest that aims to bring traditional equities onto blockchain-based platforms.
Second, while the bill is intended to strengthen the CFTC’s role, Armstrong said it could instead undermine the agency’s authority, creating confusion over jurisdiction and weakening effective oversight of crypto markets.
Third, and most critically for Coinbase, he warned that the legislation could “destroy rewards on stablecoins,” a core product for the exchange and a key component of liquidity across the crypto ecosystem.
Stablecoins play a central role in trading, payments, and decentralized finance, making any restrictions on their use or incentives a major concern for market participants.
Without the backing of Coinbase, it remains unclear whether the Senate Banking Committee can advance the bill in its current form. Coinbase has been one of the most influential corporate voices in US crypto policy debates, frequently engaging with lawmakers and regulators.
The company has also donated millions of dollars to political action committees supporting candidates viewed as favorable to digital asset innovation. As a result, its opposition carries significant political weight.
Analysts note that passing sweeping crypto legislation without buy-in from major industry players could prove difficult, particularly in a closely divided Congress.
Despite his criticism, Armstrong struck a cautiously optimistic tone, suggesting the bill could still be improved through dialogue.
He said Coinbase supports the goal of establishing clear rules for digital assets and remains willing to work with lawmakers to refine the legislation so that it balances consumer protection with innovation.
His comments suggest that the exchange is seeking substantial revisions rather than outright rejection of the bill.
The US Senate is expected to hold a markup hearing on Thursday, during which lawmakers will debate potential amendments and adjustments to the draft legislation.
The session is seen as a pivotal moment for the bill, as proposed changes could address concerns raised by Coinbase and other industry stakeholders. Whether lawmakers are willing to make significant revisions may determine whether the legislation gains broader support.
Armstrong’s opposition highlights the ongoing challenge of crafting cryptocurrency regulation that satisfies both policymakers and the rapidly evolving digital asset industry.
While lawmakers aim to bring clarity and oversight to crypto markets, industry leaders warn that poorly structured rules could hamper innovation and push businesses offshore. The fate of the current bill will likely hinge on whether a compromise can be reached that delivers regulatory certainty without undermining the sector’s growth.
For now, the outlook for comprehensive US crypto regulation remains uncertain, underscoring the complex balance between control and innovation in one of the world’s fastest-growing financial sectors.
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