In pretty shocking news coming from Washington, Coinbase has withdrawn its support for cryptocurrency legislation making its way through the Senate.
The decision highlights growing tensions over how the U.S. will finally regulate the fast-moving world of digital assets.
Why Has Coinbase Stepped Away from Cryptocurrency Legislation?
On Wednesday, Coinbase CEO Brian Armstrong made it clear that the current draft of this major cryptocurrency legislation just doesn’t cut it.
He pointed to several deal-breakers, including tough rules on tokenized equities, restrictions hitting decentralized finance (DeFi) hard, provisions that could wipe out rewards on stablecoins, and an oversized role for the Securities and Exchange Commission (SEC).
Your completely free resource hub designed to boost your knowledge of cryptocurrencies
Armstrong didn’t pin it on one single problem because he feels the whole package felt off.
Sources close to the matter say Coinbase weighed everything carefully after the full bill text dropped earlier in the week.
The bill is a hefty 270+ pages loaded with new sections, including new measures on illicit finance. With amendments piling up and little assurance that core issues would get fixed, the exchange decided the proposed cryptocurrency legislation might actually hurt customers more than help.
More breathing room for talks with Senate Banking Committee members could’ve changed things, insiders noted.
But time ran short, and the conclusion was straightforward: this version of cryptocurrency legislation* wasn’t in the best interest of the industry or everyday users.
What’s Next for Cryptocurrency Legislation?
Hours after Armstrong’s announcement, Senate Banking Committee Chair Tim Scott hit pause on the scheduled markup.
In a statement, Scott stressed that talks remain open across the crypto world, the finance sector, and both sides of the aisle.
“Everyone remains at the table working in good faith,” he said.
Even key negotiator Sen. Ruben Gallego voiced doubts, noting he couldn’t back the bill in its current shape.
While some crypto firms and groups still signal support for pushing ahead, Armstrong’s stance sent ripples. Ripple CEO Brad Garlinghouse took to X to say, “We are at the table and will continue to move forward with fair debate. I remain optimistic that issues can be resolved through the mark-up process.”
As for Coinbase and others, the goal isn’t perfection, but a version of cryptocurrency legislation that’s good enough to move forward without strangling innovation.
