- Coinbase CEO is “optimistic” about Senate passing stablecoin legislation soon, despite recent setbacks.
- A key Senate vote on the bill failed last week due to Democratic concerns, including potential benefits for Trump.
- Coinbase is set to join the S&P 500, a move Armstrong calls a sign “crypto’s here to stay.”
Coinbase CEO Brian Armstrong conveyed a sense of hope on Wednesday regarding the potential passage of landmark stablecoin legislation in the US Senate, possibly as early as this week.
His remarks came even as the bill faces significant headwinds and recent setbacks that have compelled lawmakers to intensify their negotiations.
Speaking to Yahoo Finance from Capitol Hill on Wednesday, Armstrong struck an upbeat tone. “I’m actually pretty optimistic this bill can get done,” he stated.
“There’s a lot of urgency on both sides of the aisle to see this come to fruition.”
This optimism persists despite a high-profile vote on the long-awaited legislation collapsing last week.
The breakdown occurred after some Democratic senators raised concerns about how President Trump and his family might potentially benefit from the proposed rules for stablecoins – cryptocurrencies designed to maintain a stable value by being pegged to other assets, typically the US dollar.
The path to regulation has been anything but smooth.
Beyond the specific concerns regarding potential benefits for prominent figures, other objections have surfaced, spanning anti-money laundering (AML) provisions, consumer protection measures, and questions about whether individuals close to government officials should be permitted to own or profit from these digital assets.
This confluence of concerns led to a scheduled vote last Thursday failing to secure the necessary 60 votes for passage in the full Senate.
Crypto’s mainstream push and Coinbase’s milestone
The stakes are undeniably high for the cryptocurrency industry, which views the stablecoin bill, alongside a separate market structure bill also under consideration, as crucial steps toward broader mainstream acceptance and a more favorable regulatory environment in Washington.
Interestingly, President Trump himself has advocated for new regulations in the sector while also actively participating in it through various financial ventures.
Coinbase, the largest cryptocurrency exchange in the United States, stands as a prime example of crypto’s increasing integration into traditional finance.
In a significant marker of this acceptance, the company is slated to join the prestigious S&P 500 index on Monday, replacing Discover, which was recently acquired by Capital One.
Armstrong sees this as a pivotal moment: “Coinbase joining the S&P 500 means crypto’s here to stay,” he asserted.
It’s going to be in everybody’s 401(k). Everyone’s going to have crypto exposure at least indirectly through Coinbase. And it’s also a symbol that crypto is updating the financial system.
The tug-of-war: industry interests and regulatory concerns
The legislative push for stablecoins is not without its detractors and competing interests.
The US banking industry has been actively lobbying to ensure the bill does not create loopholes that would allow crypto firms to offer bank-like products without adhering to the rigorous regulations imposed on traditional banks.
A key point of contention is their demand for language explicitly preventing US stablecoin issuers and intermediaries from offering interest to customers on their holdings.
Armstrong pushed back against this specific restriction, arguing that the bill should not prohibit the payment of interest on stablecoin assets and emphasizing the need for a level playing field for competition.
“We believe that, you know, the government shouldn’t really be doing protectionism for one industry versus another,” Armstrong said.
They should publish clear rules and have a level playing field for competition.
He also expressed hope that anti-money laundering laws would not be excessively expanded to encompass non-financial services like decentralized finance (DeFi) protocols.
Addressing the possibility of traditional banks issuing their own stablecoins should the legislation permit it, Armstrong maintained an open stance.
“Crypto is a technology to update the financial system, and we want every bank, fintech company, every payment company to be integrated,” he remarked, indicating that he believes all entities should have the ability to create stablecoins.
Looking further ahead, Armstrong envisioned a future where “the majority of all payments in the economy at some point will be running on stablecoin rails.”
Regarding Coinbase’s own operational strategy, Armstrong indicated that the company is unlikely to apply for a banking license under the current legislative proposals, as it would not be a requirement.
“We don’t have any need to or desire to pursue that,” he explained.
But obviously if something were to change in the law, we could always consider that.
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