Coinbase says it cannot back Senate ‘Clarity Act’; vote postponed

Senator Tim Scott, chair of the Senate Banking Committee, postponed a Thursday vote on a draft bill known as the Clarity Act after Coinbase’s chief executive, Brian Armstrong, wrote on X that “Coinbase unfortunately can’t support the bill as written.” The Clarity Act would assign regulatory authority over cryptocurrencies between the S.E.C.

and the C.F.T.C., a central question for the industry, and had drawn bipartisan interest. Senate Democrats pushed for ethics rules to limit U.S. officials from “issuing, endorsing or profiting” from crypto. Armstrong said the bill, as drafted, would erode the C.F.T.C.’s authority, make it “subservient to the SEC,” give the government “unlimited access” to investors’ financial records and include amendments that would “kill rewards on stablecoins.” Stablecoin issuers such as Circle want a legal framework to allow interest or rewards on those tokens; Coinbase offers some customers who hold Circle’s USDC the chance to earn 3.5 percent in “rewards.” Banks have lobbied against stablecoin rewards programs, which Armstrong suggested was an effort by traditional lenders to “ban their competition.” It is unclear what the next steps are for the Clarity Act.

Senator Cynthia Lummis, a pro-crypto member of the banking committee, criticized the postponement and said the industry’s recent response “proves they just are not ready” for such legislation.

Key Topics

Crypto, Coinbase, Clarity Act, Brian Armstrong, Sec, Cftc