Coinbase CEO Brian Armstrong has accused major U.S. banks of attempting to sabotage President Donald Trump’s pro-crypto agenda, warning that proposed changes to a Senate market structure bill could stifle innovation, ban entire categories of digital assets and strip Americans of the ability to earn yield on stablecoins.
In a wide-ranging interview with Fox Business anchor Maria Bartiromo on Mornings With Maria, Armstrong said the latest draft of legislation emerging from the Senate Banking Committee represents a “giveaway to the banks” that risks regulatory overreach and undermines recent bipartisan progress on crypto policy.
“After reviewing the Senate Banking draft over the last 48 hours, Coinbase unfortunately can’t support this bill as written,” Armstrong said, citing provisions that would effectively ban tokenized securities, impose broad prohibitions on decentralized finance (DeFi), weaken the Commodity Futures Trading Commission (CFTC), and eliminate rewards on stablecoins.
While praising the Senate’s broader efforts — including work led by Senators Tim Scott and Cynthia Lummis — Armstrong said the draft text circulated earlier this week raised “dangerous” issues that would be harder to fix once the bill reached the Senate floor.
Stablecoins at the center of the crypto conflict
At the center of the dispute is stablecoin rewards. Armstrong argued that recent legislation, including the GENIUS Act signed into law under President Trump, explicitly enabled stablecoin issuers to pay yield, a feature he described as critical to giving Americans better returns on their money.
“The banks are really coming and trying to undermine the president’s crypto agenda,” Armstrong said. “They’re trying to protect their own profit margins, taking money out of the pockets of hardworking, average Americans and putting it into the coffers of big banks hitting record profits.”
Armstrong contrasted stablecoins — which under the GENIUS Act must be backed 100% by short-term U.S. Treasuries — with traditional fractional-reserve banking, arguing that stablecoins carry less systemic risk. “There is no fractional reserve with these stablecoins,” he said. “They should not be subject to the same regulation as banks.”
Bartiromo pressed Armstrong on whether crypto platforms should face the same regulatory burdens as banks, including deposit insurance and investor protections.
Armstrong responded that such frameworks exist primarily to manage risks created by fractional-reserve lending, noting that FDIC insurance only covers deposits up to $250,000.
“If customers want to opt in to lending out their funds, they can do that,” he said. “You don’t need a bank license to do that. What requires a bank license is lending out people’s money without their permission.”
Armstrong also pushed back on claims that stablecoins threaten community banks, calling the argument a “red herring” advanced by large financial institutions. He said there is no evidence that community banks are losing deposits to stablecoins, adding that consolidation driven by big banks has posed a far greater threat since the Dodd-Frank era.
The Coinbase CEO also criticized Senate language that would subordinate the CFTC to the Securities and Exchange Commission (SEC), requiring crypto assets to pass through the SEC before potentially falling under CFTC jurisdiction.
“I can’t imagine why the Senate Ag Committee would make the CFTC a subsidiary of the SEC,” he said, pointing to the House-passed CLARITY Act, which clearly delineates oversight between digital commodities and securities.
Looking ahead, Armstrong said he remains optimistic that lawmakers can revise the Senate bill to align with President Trump’s crypto agenda. However, he issued a clear warning: “It’s better to have no bill than a bad bill.”
“If it prohibits entire categories of new products like tokenized equities, I’d rather have no bill,” Armstrong said. “We’re not going to cement something into law if it harms ordinary Americans and bans competition.”
Source: https://bitcoinmagazine.com/news/coinbase-ceo-accuses-banks-crypto
