In brief
- Coinbase abruptly pulled support for the Senate crypto market structure bill hours before a key Banking Committee vote.
- Coinbase CEO Brian Armstrong called the legislation “worse than the status quo.”
- The company has been fighting the banking lobby this week on provisions in the bill regarding stablecoin rewards.
With less than 24 hours to go until a make-or-break vote on the crypto industry’s long-coveted market structure bill, America’s most powerful crypto company has abruptly pulled its support for the legislation.
Coinbase CEO Brian Armstrong announced Wednesday afternoon that the company—one of the industry’s most influential players in Washington—is pulling its support for the bill in its current form, just hours before it was poised to face a markup on the Senate Banking Committee.
“After reviewing the Senate Banking draft text over the last 48 hours, Coinbase unfortunately can’t support the bill as written,” Armstrong said.
“This version would be materially worse than the current status quo,” he added. “We’d rather have no bill than a bad bill.”
The about-face comes as Coinbase and other industry stakeholders found themselves locked in a battle with the banking lobby over a key section in the bill that would have limited the ability of crypto companies to offer yield on stablecoin holdings.
The stablecoin-focused GENIUS Act, signed into law by President Donald Trump last July, permitted crypto companies including Coinbase to offer holders of stablecoins, crypto tokens generally pegged to the value of the dollar, generous yield on their token deposits.
But the banking industry, worried that stablecoin rewards could make traditional bank accounts less attractive, has sought to end such programs via the market structure bill. The latest draft of the legislation, released Monday, bans crypto companies from offering yield on stablecoin holdings, an ostensible victory for the banking lobby—but allows for rewards generated by activity including transactions, remittances, and membership in loyalty programs.
On Tuesday, Decrypt reported a Coinbase representative told crypto industry leaders the company could live with the new stablecoin language—so long as it didn’t get any more restrictive.
But among the 137 amendments poised to be debated at tomorrow’s markup are several aimed at making the stablecoin yield rules more favorable for banks. Some of those are bipartisan initiatives, backed by Senators Thom Tillis (R-NC) and Angela Alsobrooks (D-MD).
One D.C. insider close to the crypto industry saw Coinbase’s bold move as a negotiation tactic aimed at getting more favorable stablecoin yield language.
“They need to make their point on rewards,” the insider told Decrypt.
But another Washington policy expert, who figured Coinbase’s move would likely derail the bill’s chances of passage, described the announcement to Decrypt as “farcically inept and entitled.”
Coinbase and its allies have poured hundreds of millions of dollars into political spending not just on U.S. elections, but also on some of President Donald Trump’s pet projects, including the massive, under-construction White House ballroom.
Before pulling his support for the market structure bill Wednesday, Brian Armstrong warned that a Coinbase-aligned political watchdog would be closely monitoring how senators voted at tomorrow’s markup. A Coinbase-backed super PAC has already raised more than $116 million to spend on the 2026 midterm elections.
“They are high on their own supply that they’re an important factor in the next election,” the policy expert said of Coinbase’s Wednesday announcement.
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