Regulations regarding cryptocurrency markets in the USA have once again become the center of a heated debate. Coinbase co-founder and CEO Brian Armstrong has suggested that major US banks are trying to undermine former President Donald Trump’s crypto-friendly policies. According to Armstrong, the new market structure draft prepared in the Senate Banking Committee risks slowing economic growth by suppressing innovation and jeopardizes the recent bipartisan consensus in the crypto industry.
Senate Draft and Its Effects on the Crypto Ecosystem
In a program he attended on Fox Business, Armstrong announced that they were evaluating the final draft of the Senate Banking Committee and that they could not support it in its current form. According to him, the draft offers a framework that prioritizes the interests of banks. In particular, provisions approaching a de facto ban on tokenized securities, comprehensive restrictions on decentralized finance (DeFi) and the removal of stablecoin rewards could cause serious problems in the industry.
Coinbase CEO reminded that the GENIUS Act, which recently came into force and was signed by Trump, allows stablecoin issuers to offer interest. Armstrong emphasized that this is critical for American individuals to earn returns on their savings. He argued that large banks were creating regulatory pressure to keep this return on their balance sheets. In his view, stablecoins backed entirely by short-term U.S. Treasury bonds pose much lower risk to the financial system than fractional reserve banking.
CFTC-SEC Balance and Other Developments
One of Armstrong’s harshest criticisms was that the Senate bill would make the Commodity Futures Trading Commission (CFTC) subordinate to the Securities and Exchange Commission (SEC). In this approach, digital assets are expected to first undergo SEC auditing. Coinbase CEO argued that this structure would increase regulatory uncertainty, citing the CLARITY Act passed by the House of Representatives as an example.
While these discussions continue, another development in the USA also attracts attention. It is known that the New York State Department of Financial Services (NYDFS) is working on additional transparency and reserve reporting obligations for stablecoin issuers. Experts warn that if these steps at the state level are not harmonized with federal regulations, a fragmented structure may occur in the market.
