TLDR
- Armstrong says proposed bill would ban tokenized securities and DeFi platforms.
- Coinbase opposes any legislation that removes stablecoin yield options.
- The GENIUS Act allows stablecoin issuers to pay yield backed by U.S. Treasuries.
- Armstrong says big banks aim to protect profits by blocking new crypto products.
Coinbase CEO Brian Armstrong has claimed that major U.S. banks are working to weaken President Trump’s crypto agenda by backing Senate legislation that could ban stablecoin rewards and restrict decentralized finance. He warned that such actions could harm innovation and limit financial choices for Americans.
Concerns Over Senate Bill Draft
Coinbase CEO Brian Armstrong has warned that large U.S. banks are supporting a new Senate bill that may block stablecoin rewards and restrict decentralized finance (DeFi). In an interview on Mornings With Maria on Fox Business, Armstrong said the latest draft from the Senate Banking Committee threatens President Donald Trump’s recent crypto policies.
Armstrong explained that Coinbase cannot support the draft bill because it may ban tokenized securities, weaken the Commodity Futures Trading Commission (CFTC), and prohibit yield on stablecoins. He stated, “After reviewing the Senate Banking draft over the last 48 hours, Coinbase unfortunately can’t support this bill as written.”
Coinbase CEO Brian Armstrong:
“Banks are quietly working behind the scenes to sabotage President Trump’s pro-crypto agenda
all to protect their own massive profit margins.”
They’re choosing Wall Street profits over everyday Americans’ financial freedom.
The fight for real… pic.twitter.com/UM1trI5jw8— 𝗕𝗮𝗻𝗸XRP (@BankXRP) January 16, 2026
He described the proposed changes as a “giveaway to the banks” that could limit competition and innovation in the digital asset space. Armstrong urged lawmakers to revise the bill before it advances to a vote.
Stablecoin Rewards at the Center of Debate
A key point of conflict is the ability of stablecoin issuers to offer rewards. Armstrong said the GENIUS Act, signed into law during President Trump’s term, allows these issuers to pay yield. He believes this benefits everyday Americans by giving them better returns on digital dollar equivalents.
Armstrong stated, “The banks are really coming and trying to undermine the president’s crypto agenda. They’re trying to protect their own profit margins.” He claimed the push to remove yield options is aimed at protecting traditional banking profits, not consumers.
According to Armstrong, stablecoins must be fully backed by U.S. Treasuries under the GENIUS Act. He argued that this makes them less risky than traditional bank deposits, which rely on fractional-reserve lending.
Debate Over Regulation and Agency Roles
During the interview, Armstrong addressed whether crypto platforms should follow the same rules as banks. He said that FDIC insurance was designed to cover risks from banks lending customer funds without permission. He explained, “If customers want to opt in to lending out their funds, they can do that.”
He also questioned parts of the Senate bill that would make the Securities and Exchange Commission (SEC) the lead regulator for digital assets, placing the CFTC in a secondary role. Armstrong supported the House-passed CLARITY Act, which assigns oversight based on asset type.
“I can’t imagine why the Senate Ag Committee would make the CFTC a subsidiary of the SEC,” Armstrong said, pointing to the need for clear agency roles.
Warning Against Bad Legislation
Armstrong cautioned that if the bill bans entire categories of digital products like tokenized equities, it should not move forward. He said he prefers no bill over one that could stop innovation or limit access to financial tools.
“We’re not going to cement something into law if it harms ordinary Americans and bans competition,” he said.
While hopeful for future revisions, Armstrong made it clear that Coinbase would continue to oppose the bill unless key provisions are removed.
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