Coinbase Slams Senate Draft, Warns of Privacy and Innovation Fallout
Coinbase has drawn a clear line against a newly proposed U.S. Senate banking bill, warning that the draft would do more harm than good to the digital asset industry if passed in its current form.
In a public statement, Brian Armstrong said the company reviewed the draft legislation over a forty-eight-hour period and ultimately concluded it could not support the bill. According to Armstrong, the proposal introduces structural risks that would leave the U.S. crypto sector worse off than it is today.
Key takeaways:
- Coinbase has formally opposed the current version of the Senate banking bill.
- Brian Armstrong says the draft is worse than maintaining the status quo.
- The company believes the bill undermines innovation, privacy, and fair competition.
- Coinbase is calling for a revised draft rather than pushing the current version forward.
At the center of Coinbase’s criticism is what Armstrong described as a de facto ban on tokenized equities. He argued that the language would effectively block innovation around on-chain representations of traditional assets—an area widely seen as a critical bridge between legacy finance and blockchain-based markets.
After reviewing the Senate Banking draft text over the last 48hrs, Coinbase unfortunately can’t support the bill as written.
There are too many issues, including:
– A defacto ban on tokenized equities
– DeFi prohibitions, giving the government unlimited access to your financial…— Brian Armstrong (@brian_armstrong) January 14, 2026
The draft also raises alarms around decentralized finance. Armstrong said certain provisions would impose sweeping restrictions on DeFi, granting the government broad access to users’ financial data while eroding basic privacy protections. In his view, these measures contradict the core principles of open blockchain systems.
Coinbase warns of regulatory imbalance
Another major concern highlighted by Coinbase is a shift in regulatory power. Armstrong warned that the bill weakens the role of the Commodity Futures Trading Commission, effectively subordinating it to the Securities and Exchange Commission. He argued that concentrating authority in this way would increase uncertainty for developers and slow innovation across the sector.
Stablecoins are another flashpoint. Coinbase claims proposed amendments would eliminate rewards tied to stablecoin holdings, a move Armstrong says would tilt the playing field toward traditional banks by allowing them to suppress crypto-based competition rather than compete on equal terms.
Despite the criticism, Armstrong acknowledged the bipartisan work behind the legislation. He said Coinbase respects lawmakers’ efforts to find common ground but stressed that compromise should not come at the cost of economic freedom or technological progress. “We’d rather have no bill than a bad bill,” he said, adding that the current draft fails to meet that standard.
Coinbase framed its stance as part of a broader push to ensure crypto is regulated alongside—rather than beneath—other financial services. Armstrong reiterated that clear, balanced rules are essential if the U.S. wants to remain competitive in digital finance rather than pushing innovation offshore.
For now, Coinbase says it will continue engaging with policymakers in hopes of shaping a revised version of the bill—one that protects privacy, preserves innovation, and provides regulatory clarity without consolidating power or limiting consumer choice.
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Alexander Zdravkov is a person who always looks for the logic behind things. He has more than 3 years of experience in the crypto space, where he skillfully identifies new trends in the world of digital currencies. Whether providing in-depth analysis or daily reports on all topics, his deep understanding and enthusiasm for what he does make him a valuable member of the team.
