Coinbase chief suggests crypto legislation could revolutionize U.S. financial landscape as Senate prepares for Thursday vote.

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A cryptocurrency market structure bill, long in legislative limbo, is gaining traction in Congress, with Coinbase’s chief executive suggesting it could fundamentally alter the U.S. financial landscape.

Brian Armstrong, CEO of Coinbase, expressed his company’s endorsement of the Digital Asset Market Clarity Act on Wednesday, characterizing the proposed legislation as a “genuine compromise” that harmonizes the interests of the cryptocurrency industry with those of the established banking sector. He indicated that the bill is in its most favorable state since discussions commenced.

These remarks, reported by Fox News, were made as the Senate Banking Committee prepared for its markup of the CLARITY Act on May 14, marking the initial formal committee vote on the legislation in the Senate following months of procedural postponements and two canceled markups.

Committee Chairman Tim Scott has set a timeline for a full Senate floor vote between June and July 2026, while the White House has targeted July 4 as the date for presidential approval.

A legislative marathon is taking place

The CLARITY Act, officially H.R. 3633, the Digital Asset Market Clarity Act of 2025, received approval from the House of Representatives on July 17, 2025, through a bipartisan vote of 294–134. All 216 House Republicans supported the measure, with 78 Democrats voting in favor.

Subsequently, the bill remained with the Senate Banking Committee, experiencing two canceled markups, protracted stablecoin negotiations, and an escalating lobbying campaign between cryptocurrency firms and Wall Street financial institutions.

At its core, the legislation delineates regulatory responsibilities between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

Under the proposed law, the CFTC would assume sole oversight of spot and cash markets for digital commodities, while the SEC would retain authority over investment contract assets and initial fundraising efforts. Stablecoins are designated as a distinct category subject to shared regulatory supervision.

The Senate’s version of the bill represents an expansion of the initial House text, comprising nine titles that encompass protections for decentralized finance, provisions against illicit finance, bankruptcy safeguards for crypto asset users, and the Blockchain Regulatory Certainty Act, which establishes safe harbors for software developers who release code without managing customer assets.

The stablecoin standoff

The most contentious element of the bill pertained to stablecoin yield generation. Financial institutions expressed concerns that allowing crypto platforms to offer interest on stablecoin balances could lead to withdrawals from traditional bank accounts, thereby jeopardizing lending operations. Conversely, cryptocurrency companies, spearheaded by Coinbase, argued that such restrictions would grant banks a competitive edge and deprive Americans of novel financial instruments.

This impasse led to a compromise facilitated by Senators Thom Tillis (R-NC) and Angela Alsobrooks (D-MD). According to the finalized language in Section 404 of the bill, stablecoin issuers and associated digital asset service providers are prohibited from offering yield on balances if that yield is economically or functionally equivalent to bank interest.

Rewards tied to transactional activity, such as cashback on payments, incentives linked to transactions, and benefits connected to commerce, are still permissible. Consequently, a stablecoin holder who engages in no active participation will not accrue any return.

Armstrong publicly affirmed his support following the disclosure of the compromise text, with Coinbase’s Chief Policy Officer Faryar Shirzad stating that the industry had “secured what is important.”

Speaking on Fox, Armstrong commended Senators Tillis, Alsobrooks, and their teams for their efforts in bringing the parties together. “I must give significant credit to Senators Brooks and Tillis and their staff who worked tirelessly on this,” he remarked.

Armstrong characterized the financial sector as rapidly moving towards the integration of digital assets.

“I interact with numerous bank CEOs, and many are embracing this as a business growth opportunity,” he stated. “They are incorporating stablecoins as quickly as they can.”

In April, over 100 cryptocurrency firms and industry organizations, including the Crypto Council for Innovation and the Blockchain Association, submitted a letter to the Senate Banking Committee urging the panel to advance the bill. They cautioned that ongoing delays risked driving innovation and capital away from the United States.

Treasury Secretary Scott Bessent echoed this sentiment, informing a Senate panel that the legislation is crucial for preserving the dollar’s standing as the global reserve currency.

The markup scheduled for Thursday is not the final step. Should the Banking Committee approve the bill, it must be reconciled with a version passed by the Senate Agriculture Committee in a party-line vote of 12–11 in January 2026.

Securing 60 votes for a full Senate floor vote necessitates Democratic backing, making the ongoing debate over ethics provisions—specifically language addressing the cryptocurrency holdings of President Trump and his family—the most significant remaining point of contention for the bill.

Source: : bitcoinmagazine.com