Coinbase Draws a Line in the Sand on Market Structure Bill

 

Coinbase is stepping back from Washington’s biggest crypto push yet.

Just days before a crucial vote in the Senate Banking Committee, the largest US crypto exchange says it will not support the Senate’s sweeping crypto market structure bill in its current form. The message from Coinbase CEO, Brian Armstrong, is blunt. Regulatory clarity matters, but not at any cost.

The move highlights a growing divide between lawmakers eager to lock in federal rules and an industry increasingly wary of legislation that could reshape its business in unintended ways.

 

A Bill Meant to End the Gray Area

The Senate bill, months in the making, is designed to finally spell out how digital assets are regulated in the United States. At its core, the proposal tries to answer long-standing questions about which crypto assets fall under securities law, which should be treated as commodities, and how oversight should be split between regulators.

For years, crypto companies have complained that the lack of clear rules has pushed innovation offshore and left firms vulnerable to enforcement actions after the fact. On paper, this bill is supposed to fix that.

But as the text has taken shape, it has also picked up provisions that some in the industry see as deal-breakers.

 

Stablecoin Rewards Become the Flashpoint

For Coinbase, the biggest problem sits with stablecoins.

The draft legislation includes language that could sharply limit or effectively eliminate rewards paid to users who hold stablecoins on platforms like Coinbase. These rewards are not technically interest paid by issuers, but incentives offered by exchanges and intermediaries. Still, critics argue they look and feel a lot like bank deposits, without bank-style regulation.

Traditional banking groups have pushed hard for tighter rules here. Their concern is straightforward. If consumers can earn yield on dollar-pegged crypto tokens outside the banking system, deposits could drain from insured banks, particularly smaller ones.

Coinbase sees it differently. Stablecoin rewards have become a meaningful part of how crypto platforms compete and how users engage with dollar-based crypto products. Cutting them off, the company argues, would harm consumers and hand an advantage back to traditional finance.

In private and public conversations, Coinbase executives have made it clear that they are unwilling to back a bill that undercuts what they view as a legitimate and already regulated product.

"After reviewing the Senate Banking draft text over the last 48 hours, Coinbase unfortunately can’t support the bill as written,” Armstrong said. "This version would be materially worse than the current status quo, we'd rather have no bill than a bad bill."

 

Why This Matters Beyond Coinbase

Coinbase’s stance carries weight. It is one of the most politically active crypto companies in Washington and often serves as a bellwether for broader industry sentiment.

If Coinbase is out, others may quietly follow.

That raises the risk that lawmakers end up with a bill that lacks meaningful industry buy-in, or worse, one that passes but leaves key players unhappy enough to challenge or work around it.

Some firms are already exploring alternatives, including banking charters or trust licenses, as a hedge against restrictive federal rules. Others may simply slow US expansion and look overseas.

 

A Narrow Path Forward in the Senate

The timing is not ideal.

The Senate Banking Committee is expected to vote on the bill imminently, but support remains fragile. Lawmakers are divided not just on stablecoins, but also on how to handle decentralized finance, custody rules, and even ethics provisions tied to political exposure to crypto.

Add in election-year politics, and the window for compromise looks tight.

If the bill stalls or fails in committee, there is a real chance it gets pushed into the next Congress. That would mean at least another year, and likely more, of regulatory uncertainty.

 

No Law vs a Bad Law

Behind the scenes, a familiar argument is playing out.

Some in Washington believe that imperfect legislation is better than none at all. The industry, scarred by years of enforcement-first regulation, is no longer convinced.

Coinbase’s decision reflects a growing view among crypto companies that a flawed law could do more long-term damage than continued ambiguity. Once rules are written into statute, they are far harder to undo.

For now, the standoff continues.

 

Whether lawmakers soften the bill to keep major players on board or push ahead regardless may determine not just the fate of this legislation, but the shape of US crypto regulation for years to come.

 

Stay Connected

You can stay up to date on all News, Events, and Marketing of Rare Network, including Rare Evo: America’s Premier Blockchain Conference, happening  July 28th-31st, 2026 at The ARIA Resort & Casino, by following our socials on X, LinkedIn, and YouTube.

Congress Is Holding Up Critical Crypto Legislation That Needs To Move Forward

 

The United States has spent years discussing the need for clear digital asset rules, yet the country still operates without a comprehensive federal framework. The latest attempt, a Senate crypto market structure bill, is the closest the country has ever come to meaningful clarity. It is a practical blueprint that defines who regulates what, how digital assets are classified, and what responsibilities exchanges, stablecoin issuers, and decentralized platforms must meet.

But despite the urgency, talks have stalled. Committees have debated the text, staff have worked through countless revisions, and lawmakers from both parties have acknowledged the need for action. Even so, the bill remains stuck. The longer this continues, the more the United States risks falling behind other global markets that have already committed to clear, adaptable digital asset rules.

This moment requires Congress to rise above politics and deliver the regulatory foundation that the industry, consumers, and the financial system have been waiting for.

 

What the Bill Actually Does and Why It Matters

At the center of the bill is a simple idea. The country needs consistent, predictable rules for digital assets. Right now, those rules shift depending on the regulator, the administration, or the outcome of a lawsuit. The bill attempts to fix that by establishing the first clear legal definitions for digital commodities, digital securities, stablecoins, and decentralized protocols.

A functioning regulatory system needs three things. First, clear definitions. Second, clear jurisdiction. Third, clear expectations for compliance. The bill advances all three.

 

It clarifies the line between the SEC and the CFTC.
Under the bill, digital commodities such as Bitcoin and other decentralized networks fall under the CFTC. Tokenized securities, fundraising activities, and investor disclosures fall under the SEC. This stops the confusing overlap that has slowed innovation and triggered years of enforcement disputes.

It creates standards for exchanges and trading platforms.
Platforms would need to meet transparency, reporting, and consumer protection requirements similar to traditional financial markets. That means better custody policies, clear listing standards, and safer trading environments.

It establishes a federal structure for stablecoin oversight.
Stablecoins have become one of the most widely used instruments in crypto, yet they exist in a patchwork of state regulations. The bill sets national reserve requirements, disclosure standards, and operational rules that protect consumers without crushing innovation.

It acknowledges that DeFi exists and needs thoughtful treatment.
Rather than forcing decentralized platforms into legacy models, the bill attempts to create guardrails that apply where appropriate while allowing innovation to continue. That is a practical approach to a fast evolving sector.

 

When taken together, these provisions offer a stable foundation. Builders would know how to operate. Investors would understand the risks. Consumers would gain protection. Courts would have clearer guidance. Regulators would finally have a shared roadmap.

This is the kind of clarity the United States has been missing.

 

Why the Talks Stalled and Why That Is Dangerous

Despite broad agreement on the need for regulation, negotiations in the Senate have hit repeated walls. Some lawmakers want adjustments to agency authority. Others want the bill tied to broader governance battles involving commissions and appointments. Still others worry that DeFi or stablecoin provisions need extra refinement.

Senator Cory Booker (D-NJ) has emerged as one of the central Democratic voices in the negotiations around the Senate’s crypto market structure bill. In recent discussions, he made it clear that unresolved concerns about the balance of power inside federal financial regulators could threaten the bill’s chances of moving forward.

Speaking at a recent policy summit, Booker said he does not feel confident that the White House will follow through on commitments to maintain Democratic representation at agencies such as the SEC and the CFTC. He argued that the issue is not a minor detail, but a structural concern that could influence how digital asset rules are interpreted and enforced.

Booker framed his concern as part of a broader pattern. He pointed to the expansion of presidential authority over independent regulators and said that previous actions have shown how easily that power can be used to benefit political allies. In his view, the crypto bill must be paired with safeguards that ensure regulators remain balanced, credible, and resistant to political pressure.

 

His remarks reflect the tension inside the negotiations. Lawmakers agree that the United States needs a clear regulatory framework for digital assets, but disagreements over governance and control have slowed progress. Booker’s warning adds another layer to the challenge. Unless Congress resolves questions about how regulators are structured and overseen, the bill may struggle to pass, even though both parties acknowledge the importance of moving it across the finish line.

Both sides of the aisle agree on why this bill needs to pass, but it seems that traditional political maneuvering is getting in the way of doing what needs to be done.

 

No serious market can thrive without predictable oversight. Instead of rules, companies face enforcement by interpretation, which is inefficient and often arbitrary.

This can lead to talented teams and institutional investors favoring jurisdictions with clarity, not uncertainty. And without federal standards, individuals still face risk from poorly governed platforms and unclear custody practices.

Other countries have already built regulatory frameworks. The United States is falling behind. Congress does not need a perfect bill. It needs a functioning bill, and it needs one soon.

 

Why Advocacy Matters Now

This is why industry voices and pro innovation civic groups have become increasingly vocal. These advocacy groups argue that regulation should be shaped by long term economic interests and consumer protection, not short term political strategy. Their work matters because it puts pressure on Congress to move the bill based on its merits, rather than letting unrelated disputes hold back an entire sector.

Without public pressure, stalled talks can drag on for months or even years. With coordinated advocacy, lawmakers are reminded that millions of Americans use digital assets and deserve rules that protect them without suffocating innovation.

 

 

Congress Must Get This Over The Line

The stalled Senate bill is more than another legislative delay. It represents a turning point. If Congress cannot pass a comprehensive digital asset framework in the next legislative cycle, it risks surrendering leadership in one of the most important technological shifts of this century.

Blockchain technology is reshaping finance. Tokenization is entering mainstream markets. Decentralized applications are changing how value moves around the world. These developments will not wait for Washington to get its process in order.

The United States can lead, or it can react. It can set the rules, or it can let others define them. But it cannot do either while political maneuvering blocks the country’s first serious attempt at clarity.

Innovation needs rules. Investors need guidance. Consumers need protection. Markets need stability. And the country needs a framework that can evolve with technology rather than fall behind it.

 

Congress has the bill. It has the structure. It has the drafts and definitions. What it needs now is the discipline and courage to pass it.

 

Stay Connected

Rare PAC, launched by Rare Network, the force behind the Rare Evo blockchain conference, works to ensure that the United States remains a global leader in decentralized technologies and next-generation internet infrastructure. It helps to drive the message that the country needs clear, functional digital asset laws now and supports candidates who believe the same.

If you would like more information on Rare PAC, how you can contribute to building a crypto-forward America and foster a supportive legal and regulatory environment that is critical to unleashing the full potential of Web3, digital assets, and financial freedom for all Americans; please visit https://rarepac.io/ today to learn more how you can make sure your voice is heard.