Coinbase CEO Brian Armstrong withdraws support for the CLARITY Act, accusing banks of using the bill to kill crypto rewards and competition.Coinbase CEO Brian Armstrong withdraws support for the CLARITY Act, accusing banks of using the bill to kill crypto rewards and competition.

Brian Armstrong Slams CLARITY Act: "Banks Trying to Kill Competition"

2 min read

In a dramatic shift for U.S. crypto policy, Coinbase CEO Brian Armstrong has officially pulled the exchange's support for the Digital Asset Market Clarity Act of 2026. Armstrong’s reversal comes just as the Senate Banking Committee prepared to vote on the bill, which was initially hailed as a landmark for regulatory certainty.

According to Armstrong, the current draft has been "poisoned" by banking lobbyists seeking to stifle the growth of the digital asset sector. "We'd rather have no bill than a bad bill," Armstrong stated, emphasizing that the proposed legislation would leave the industry in a worse position than the current status quo.

Why Coinbase is Breaking with Lawmakers

The primary "red line" for Coinbase revolves around stablecoin rewards. The latest version of the CLARITY Act includes provisions—strongly supported by traditional banking groups—that would effectively ban platforms from offering passive interest or rewards on payment stablecoins like USDC.

Banking lobbyists have argued that these rewards trigger "deposit flight," siphoning billions away from traditional savings accounts. Armstrong, however, views this as a direct attack on consumer choice. "We can't really have banks come in and try to kill their competition at the expense of the American consumer," he noted during a recent interview.

Key Issues in the CLARITY Act

Beyond stablecoin rewards, Armstrong highlighted several critical flaws in the 300-page document:

  • De Facto Ban on Tokenized Equities: The bill imposes restrictions that would make it nearly impossible to trade stocks on the blockchain.
  • DeFi Prohibitions: New rules would grant the government "unlimited access to financial records," severely undermining user privacy.
  • Erosion of CFTC Authority: The draft expands the SEC's power to classify assets, moving away from the industry-preferred CFTC oversight.

The Battle for the Future of Finance

This legislative standoff highlights the growing tension between traditional exchanges and the crypto ecosystem. While some industry leaders like Ripple's Brad Garlinghouse still see the bill as a "step forward," Coinbase’s withdrawal has effectively stalled the Senate vote, forcing lawmakers back to the drawing board.

For investors, the outcome of this "bank vs. crypto" war will determine whether high-yield stablecoin products remain a viable alternative to low-interest bank accounts.

Disclaimer: The articles reposted on this site are sourced from public platforms and are provided for informational purposes only. They do not necessarily reflect the views of MEXC. All rights remain with the original authors. If you believe any content infringes on third-party rights, please contact service@support.mexc.com for removal. MEXC makes no guarantees regarding the accuracy, completeness, or timeliness of the content and is not responsible for any actions taken based on the information provided. The content does not constitute financial, legal, or other professional advice, nor should it be considered a recommendation or endorsement by MEXC.

You May Also Like

XERO Price Crash: Shares Sink 16% to Three-Year Low

XERO Price Crash: Shares Sink 16% to Three-Year Low

Xero Ltd shares trade near $80.82 as of writing, down almost 16% on the session and hovering near their lowest levels since early 2023. Early trading briefly pushed
Share
Coinstats2026/02/04 16:55
YwinCap View On Whether The Gold Market Is In A Bubble

YwinCap View On Whether The Gold Market Is In A Bubble

Singapore (PinionNewswire) — In early 2026, a central question for investors and traders alike is whether the dramatic rise in gold prices represents a speculative
Share
Blocktelegraph2026/02/04 17:12
Foreigner’s Lou Gramm Revisits The Band’s Classic ‘4’ Album, Now Reissued

Foreigner’s Lou Gramm Revisits The Band’s Classic ‘4’ Album, Now Reissued

The post Foreigner’s Lou Gramm Revisits The Band’s Classic ‘4’ Album, Now Reissued appeared on BitcoinEthereumNews.com. American-based rock band Foreigner performs onstage at the Rosemont Horizon, Rosemont, Illinois, November 8, 1981. Pictured are, from left, Mick Jones, on guitar, and vocalist Lou Gramm. (Photo by Paul Natkin/Getty Images) Getty Images Singer Lou Gramm has a vivid memory of recording the ballad “Waiting for a Girl Like You” at New York City’s Electric Lady Studio for his band Foreigner more than 40 years ago. Gramm was adding his vocals for the track in the control room on the other side of the glass when he noticed a beautiful woman walking through the door. “She sits on the sofa in front of the board,” he says. “She looked at me while I was singing. And every now and then, she had a little smile on her face. I’m not sure what that was, but it was driving me crazy. “And at the end of the song, when I’m singing the ad-libs and stuff like that, she gets up,” he continues. “She gives me a little smile and walks out of the room. And when the song ended, I would look up every now and then to see where Mick [Jones] and Mutt [Lange] were, and they were pushing buttons and turning knobs. They were not aware that she was even in the room. So when the song ended, I said, ‘Guys, who was that woman who walked in? She was beautiful.’ And they looked at each other, and they went, ‘What are you talking about? We didn’t see anything.’ But you know what? I think they put her up to it. Doesn’t that sound more like them?” “Waiting for a Girl Like You” became a massive hit in 1981 for Foreigner off their album 4, which peaked at number one on the Billboard chart for 10 weeks and…
Share
BitcoinEthereumNews2025/09/18 01:26