Coinbase has stepped back from supporting proposed US crypto market structure legislation, arguing that the latest draft could damage innovation and consumer choice. The decision adds new uncertainty to an already fragile legislative process as lawmakers debate how digital assets should be regulated.
Coinbase Raises Objections to Current Draft
The Armstrong said the bill, in its current form, would be materially worse than existing regulations. After reviewing the latest text, Coinbase concluded it could not support the proposal, stating that no legislation is preferable to a flawed framework. The concerns emerged as the Senate Banking Committee prepared to advance the bill.
Among the most significant issues cited were provisions that could restrict decentralized finance activity, limit tokenized equities, and expand government access to financial records, raising privacy concerns. Coinbase also warned that the draft could eliminate stablecoin rewards, a revenue stream that has become increasingly important for crypto platforms and users.
The proposal is also seen as shifting authority away from commodities regulators while granting broader powers to securities regulators, a move the industry fears could slow innovation through stricter enforcement.
Ripple CEO Brad Garlinghouse said ;
While some market participants stress the need for a clear crypto framework, others believe revisions are essential. With banking and crypto stakeholders pushing competing priorities, negotiations are expected to continue as lawmakers seek a compromise that balances innovation, competition, and consumer protection.
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