Citron Research has accused Coinbase CEO Brian Armstrong of withdrawing support for the Senate’s CLARITY Act to protect the exchange’s stablecoin yield business from competition. This accusation comes as debate over the bill intensifies in Washington and across the cryptocurrency industry.
- •Citron alleges that Armstrong withdrew Coinbase’s support for the CLARITY Act to shield its stablecoin yield business from regulated tokenization rival Securitize.
- •Armstrong has voiced concerns that the bill could ban tokenized equities, expand the SEC’s control over DeFi, and end stablecoin rewards, stating a preference for no bill over a detrimental one.
- •Ripple CEO Brad Garlinghouse and Washington insiders suggest the bill might be revived if a compromise on stablecoin yields and tokenized securities rules is reached among banks, Coinbase, and Democrats.
In a post on X, Citron Research stated that Armstrong’s recent comments on CNBC indicated concern about competition from Securitize, a tokenized securities firm holding necessary licenses for market operation. Citron claims Coinbase desires regulatory clarity without enabling rivals, alleging the crypto firm is resisting because a revised bill might favor Securitize over Coinbase.
Coinbase formally withdrew its support for the crypto market structure bill on January 14. Armstrong outlined several objections in a public statement, including what he described as a de facto ban on tokenized equities, increased government access to DeFi user data, a shift of authority from the Commodity Futures Trading Commission (CFTC) to the Securities and Exchange Commission (SEC), and draft language that could eliminate stablecoin rewards. Armstrong declared that Coinbase would “rather have no bill than a bad bill,” though he later expressed optimism about potential changes.
Crypto YouTuber George Tung, known as CryptosRUs, defended Armstrong, suggesting that banks are resisting stablecoins due to competitive pressures. Tung highlighted the significant difference between average U.S. savings account yields and stablecoin yields backed by short-term Treasuries, arguing that clear regulations should allow both banks and crypto firms to compete fairly.
The Senate Banking Committee postponed its scheduled markup of the crypto market structure bill on January 15. Committee chair Tim Scott indicated that discussions were ongoing across party lines and with industry stakeholders, but no new date has been set.
Ripple CEO Brad Garlinghouse commented during a panel at CfC St. Moritz that Coinbase had raised “fair concerns,” but expressed surprise at the intensity of Armstrong’s opposition to the bill. Garlinghouse added that the majority of the industry remained actively involved in attempting to resolve the issues.
Journalist Eleanor Terrett reported that tensions remain high behind the scenes, with some lawmakers, staffers, and industry players still expressing frustration over the collapse of the Banking Committee markup. However, she noted that some stakeholders believe the bill could still be salvaged if an agreement on stablecoin yields is reached between banks, Coinbase, and Democrats in the near future.
Terrett also mentioned that the provision concerning tokenized securities, identified as Section 505, might be less contentious than initially perceived. Several tokenization firms have stated that the language was taken out of context. Armstrong and others have expressed hope that this section could be modified or removed entirely, with the outcome of these potential adjustments likely determining whether the CLARITY Act moves forward or stalls.