Coinbase CEO Brian Armstrong announced that the exchange will withdraw its backing of the Senate’s bipartisan crypto market structure proposal, the Digital Asset Market Clarity Act. Armstrong stated that the current draft is "materially worse than the status quo." He further added that the industry would "rather have no bill than a bad bill," marking a significant reversal just hours before a crucial committee vote.
This announcement preceded a scheduled markup and vote by the Senate Banking Committee on Thursday, January 15, 2026, led by Chair Tim Scott. The timing highlights the considerable industry opposition to the 278-page draft that was released late Monday night.
Key Objections in the Draft
Armstrong detailed several critical issues that led to Coinbase's reversal. A primary concern involves proposed limitations on rewards for simply holding stablecoins, which Coinbase argues would effectively eliminate stablecoin yield. Banking groups have advocated for these restrictions, contending they would prevent deposits from migrating from traditional banks to digital assets.
The exchange also criticized the bill's allocation of regulatory authority. Coinbase believes the draft weakens the Commodity Futures Trading Commission (CFTC) while strengthening the U.S. Securities and Exchange Commission (SEC). Following years of what the industry perceives as regulation-by-enforcement, Coinbase finds placing the CFTC in a subordinate role unacceptable.
Further objections were raised regarding financial surveillance provisions. Armstrong cautioned that the draft could grant the U.S. Treasury its most extensive transaction-monitoring powers since the USA PATRIOT Act, including the ability to freeze transactions without a court order. He also pointed to language that he described as prohibitive for decentralized finance and a de facto ban on tokenized equities.
Legislative and Market Implications
Coinbase's withdrawal of support carries immediate legislative consequences. Analysts at Bloomberg Intelligence suggested that the loss of industry backing and the erosion of bipartisan consensus have reduced the likelihood of the bill's passage in the first half of 2026 to below 70%. The extent of the disagreement is further evidenced by the 137 amendments filed ahead of the committee vote, indicating a widening gap between banking interests and crypto-native firms.
The stakes for Coinbase are substantial, as stablecoin rewards constitute a significant revenue stream. Projections estimate that the exchange generated approximately $1.3 billion from stablecoin-related income in 2025 alone.
Despite the industry pushback, Senator Scott has expressed his intention to proceed with the markup. He positions the bill as vital for establishing a clear federal framework for digital asset markets, even as industry leaders signal their readiness to disengage entirely.