In the United States, regulations regarding the cryptocurrency markets have become a focal point of intense discussion. Brian Armstrong, the co-founder and CEO of Coinbase, claims that large US banks are trying to undermine the crypto-friendly policies of former President Donald Trump. Armstrong warns that the new market structure draft being prepared in the Senate Banking Committee might stifle innovation, posing a threat to economic growth and jeopardizing the recent bipartisan consensus in the crypto sector.
Senate Draft and Its Impact on the Crypto Ecosystem
During a program aired on Fox Business, Armstrong revealed their assessment of the latest draft from the Senate Banking Committee, stating that they cannot support it in its current form. According to him, the draft prioritizes the interests of banks, with provisions approaching a de facto prohibition on tokenized securities, comprehensive restrictions on decentralized finance (DeFi), and the removal of stablecoin rewards, potentially causing significant problems within the industry.
Armstrong highlighted the importance of the recently enacted GENIUS Act, signed by Trump, which allows stablecoin issuers to offer interest. He underscored its critical role in enabling American individuals to earn returns on their savings. Armstrong argued that major banks are exerting regulatory pressure to keep these returns within their own balance sheets. He emphasized that stablecoins, fully backed by short-term US Treasury securities, pose significantly lower risks to the financial system compared to fractional reserve banking.
CFTC-SEC Balance and Other Developments
One of Armstrong’s harshest criticisms targets the Senate draft’s proposal to place the Commodity Futures Trading Commission (CFTC) under the Securities and Exchange Commission’s (SEC) jurisdiction. This approach implies that digital assets would first undergo SEC oversight. Referencing the CLARITY Act passed by the House of Representatives, the Coinbase CEO argued that this structure would increase regulatory uncertainty.
Meanwhile, another development in the US deserves attention. The New York State Department of Financial Services (NYDFS) is reportedly working on additional transparency and reserve reporting requirements for stablecoin issuers. Experts warn that if these state-level measures are not harmonized with federal regulations, they could lead to a fragmented market structure.
