Coinbase CEO Brian Armstrong said the US Senate's failure to advance the CLARITY Act could benefit his exchange by limiting competition from major Wall Street firms entering the crypto market, though he maintained the legislation would have been beneficial for the broader industry.
Mixed Impact on Coinbase
In a September 20 interview, Armstrong explained that the bill's failure presents a double-edged outcome for Coinbase. While regulatory clarity could attract traditional financial institutions to crypto, it would also introduce new competitors to the space.
"Every major financial services company in the world would have started integrating crypto with regulatory clarity," Armstrong said. "We would have had tons more competition. So in a way, honestly, it arguably could even be better for us to go under this path, because we're one of the few companies who's willing to go through that."
Previous Objections Addressed
Armstrong revisited Coinbase's concerns about an earlier version of the legislation. The January draft raised issues around tokenized equities, penalties for decentralized finance developers, the Commodity Futures Trading Commission's authority over spot markets, and stablecoin rewards.
He stated that those four issues had been addressed in the latest Senate draft, removing Coinbase's prior objections to the bill.
Procedural Failure in Senate
The Senate vote on September 15 was procedural rather than a final vote on the bill. It failed to advance by a 49-50 margin, falling short of the 60 votes required to proceed. Armstrong suggested the process could have enabled lawmakers to negotiate amendments and continue discussions.
Shift to Regulatory Path
With the legislation stalled, Armstrong said Coinbase would continue working with the SEC and CFTC as they develop rules for the industry. "In the short term, it's probably better for us in certain ways," he told interviewer Scott Melker. "It's a little bit more permissive to have the SEC and CFTC do it."
Armstrong is treating the bill as effectively dead unless lawmakers revive it. Seven Democratic senators have indicated that the setback does not mark the end of efforts to advance crypto legislation.
Armstrong added that Coinbase was willing to work with banks rather than treating them solely as rivals, amid wider disagreement over how crypto regulation should address stablecoin rewards and banking relationships.
