U.S. Crypto Bill Faces Turbulence as Coinbase Pushes Back

In the United States, there has been a new controversy over the fight for federal cryptocurrency legislation, particularly the Digital Asset Market Clarity Act. Recently, U.S. Treasury Secretary Scott Bessent denounced Coinbase and other industry participants for stalling the legislation's advancement, claiming that they would prefer no regulating measure at all to one that they disapprove of.

Brian Armstrong, the CEO of Coinbase, has previously said that he would prefer "no bill than a bad bill," further dividing the political and business communities on the appropriate oversight of digital assets.

• The Crypto Bill at a Standstill
• Industry Rift: Coinbase vs. Other Crypto Players & Banks
• Coinbase's Position: "No Bill Than Bad Bill"
• Regulatory Tug-of-War: Traditional Finance vs Crypto Innovation
• Why This Regulatory Battle Matters?

The Crypto Bill at a Standstill

In early 2026, the U.S. Senate attempted to advance a federal regulatory framework for cryptocurrencies, popularly known as the “market structure bill”. The purpose of this bill was to provide clarification on the classification and supervision of digital asset regulators like the Commodity Futures Trading Commission (CFTC) and the U.S. Securities and Exchange Commission (SEC), including Bitcoin, Ethereum, DeFi products, and stablecoins.

But, Coinbase CEO Brian Armstrong retracted his support for this bill’s draft, emphasising that it would “kill rewards on stablecoins” and would undermine regulatory oversight. It was because of the statement that it prompted the Senate Committee to postpone its hearing, effectively stalling the legislation’s progression.

Industry Rift: Coinbase vs. Other Crypto Players & Banks

Dan Bessent’s statement, “banks and other crypto firms are united against Coinbase”, implies that the industry division goes beyond a normal regulatory dispute. He referred to minor industry players as “recalcitrant actors” to describe those he says would rather see no legislation than a version with provisions they dislike.

As per the present draft, the stablecoin yield-bringing scheme, like incentives offered by Coinbase since 2019, may be severely restricted, which would ultimately support conventional banking firms' idea that such yield is similar to deposit interest. As per the GENIUS Act 2025, stablecoins are an essential component of the cryptocurrency ecosystem because they maintain a 1:1 peg with the U.S. dollar.

The historic GENIUS Act mandates that issuers support stablecoins that have liquid reserves, like U.S. dollars or other low-risk assets. While the law established basic stablecoin rules, the recent market structure bill was expected to build on it with broader digital asset governance until Coinbase’s withdrawal of support complicated the process.

Coinbase's Position: "No Bill Than Bad Bill"

In opposition to the Senate Version of the CLARITY Act, Coinbase CEO Brian Armstrong argued that restrictive stablecoin compensation and a change in regulatory monitoring that are detrimental to the sector will hinder competition.

Armstrong also remarked that “we’d rather have no bill than a bad bill”. This statement prompted lawmakers to reevaluate moving forward with the draft without making any major adjustments. Armstrong expressed his concerns that:

• The proposed limitations may limit stablecoin yield for consumers.
• Wide-ranging regulations might give the SEC more authority over areas that industry people believe belong to the CFTC.

The pushback from Coinbase successfully stalled the bipartisan momentum that was accumulating around a more precise legal framework.

Regulatory Tug-of-War: Traditional Finance vs Crypto Innovation

Bessent's comments include the assertion that Coinbase's strong stance is opposed by both conventional banks and other cryptocurrency companies.

Banking organisations have resisted, especially with regard to stablecoin yield provisions, claiming that high yields on digital assets could divert deposits from conventional banks and cause disruptions in lending markets, even though some cryptocurrency companies want certain provisions changed to safeguard innovation and reward incentives.

The objective for fintech companies to have restricted access to Federal Reserve master accounts, frequently referred to as "skinny accounts," is another area of contention between banking regulators and cryptocurrency stakeholders.

Senator Cynthia Lummis and other lawmakers have called on banks to embrace stablecoin technology themselves, emphasising that rather than endangering established financial systems, federal regulation may instead strengthen them.

Why This Regulatory Battle Matters?

A larger attempt to keep up with international regulatory changes includes the CLARITY Act. The new U.S. Senate bill, known as the GENIUS Act 2025, created the first regulatory framework for stablecoins, a market with potential assets of over $150 billion.

However, the CLARITY Act, which is currently obstructed, addresses custody requirements, compliance duties, and the fundamental framework of digital asset oversight.

According to analysts, unresolved legislative ambiguity might force innovation overseas or leave consumers helpless as the crypto markets continue to expand and change.

The future of digital finance in the U.S. is still being shaped by the continuous conflict between industry flexibility and regulatory clarity.

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