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"

2026/01/16 19:30
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.

Market Opportunity
The AI Prophecy Logo
The AI Prophecy Price(ACT)
$0.01461
$0.01461$0.01461
+1.45%
USD
The AI Prophecy (ACT) Live Price Chart
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 [email protected] 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

Shibarium May No Longer Turbocharge Shiba Inu Price Rally, Here’s Reason

Shibarium May No Longer Turbocharge Shiba Inu Price Rally, Here’s Reason

The post Shibarium May No Longer Turbocharge Shiba Inu Price Rally, Here’s Reason appeared on BitcoinEthereumNews.com. Shibarium, the layer-2 blockchain of the Shiba Inu (SHIB) ecosystem, is battling to stay active. Shibarium has slipped from hitting transaction milestones to struggling to record any transactions on its platform, a development that could severely impact SHIB. Shibarium transactions crash from millions to near zero As per Shibariumscan data, the total daily transactions on Shibarium as of Sept. 16 stood at 11,600. This volume of transactions reflects how low the transaction count has dropped for the L2, whose daily average ranged between 3.5 million and 4 million last month. However, in the last week of August, daily transaction volume on Shibarium lost momentum, slipping from 1.3 million to 9,590 as of Aug. 28. This pattern has lingered for much of September, with the highest peak so far being on Sept. 5, when it posted 1.26 million transactions. The low user engagement has greatly affected the transaction count in recent days. In addition, the security breach over the weekend by malicious attackers on Shibarium has probably worsened issues. Although developer Kaal Dhairya reassured the community that the attack to steal millions of BONE tokens was successfully prevented, users’ confidence appears shaken. This has also impacted the price outlook for Shiba Inu, the ecosystem’s native token. Following reports of the malicious attack on Shibarium, SHIB dipped immediately into the red zone. Unlike on previous occasions where investors accumulated on the dip, market participants did not flock to Shiba Inu. Shiba Inu price struggles, can burn mechanism help? With the current near-zero crash in transaction volume for Shibarium, SHIB’s price cannot depend on it to support a rally. It might take a while to rebuild user confidence and for transactions to pick up again. In the meantime, Shiba Inu might have to rely on other means to boost prices from its low levels. This…
Share
BitcoinEthereumNews2025/09/18 07:57
Crypto Investors Install Golden Trump Bitcoin Statue Outside US Capitol

Crypto Investors Install Golden Trump Bitcoin Statue Outside US Capitol

TLDR Crypto investors erected a 12-foot golden statue of Trump holding Bitcoin outside the US Capitol on Wednesday The statue was placed on the National Mall as part of a Pump.fun livestream stunt and memecoin promotion Organizers said it honors Trump’s support for cryptocurrency and was timed with the Fed’s interest rate cut The statue [...] The post Crypto Investors Install Golden Trump Bitcoin Statue Outside US Capitol appeared first on CoinCentral.
Share
Coincentral2025/09/18 15:05
Maximizing Energy Efficiency with Proper New Window Installation

Maximizing Energy Efficiency with Proper New Window Installation

Energy efficiency is a critical consideration for any modern home or building project. Windows play a significant role in maintaining indoor comfort, reducing energy
Share
Techbullion2026/02/14 19:12