Coinbase CEO Rejects Senate Crypto Bill, Citing Tokenized-Equity Ban, DeFi Rules and Stablecoin Cuts
Coinbase CEO Brian Armstrong withdrew support for the Senate Banking Committee’s Digital Asset Market Structure Act after reviewing the draft, calling it “materially worse than the current status quo.” Coinbase identified four dealbreakers: language that would create a de facto ban on tokenized equities (hurting RWA issuance); sweeping DeFi provisions that could extend Bank Secrecy Act obligations into developer and non‑custodial layers and give regulators broad access to user financial records; clauses that would weaken the CFTC’s authority in favor of more confined SEC control; and amendments that would eliminate or restrict stablecoin yield programs (threatening revenue sources tied to stablecoin rewards). Armstrong posted his objections publicly hours before a scheduled committee markup, a move credited with delaying the vote indefinitely and causing betting odds of passage to fall. Market participants treated Coinbase’s withdrawal both as a substantive policy stance and a possible negotiating tactic; commentary from industry figures such as Galaxy Digital’s Mike Novogratz urged calm while talks continue. For traders, the key implications are heightened legislative uncertainty, potential long‑running constraints on tokenized equities and DeFi activity, and possible downward pressure on crypto sectors tied to stablecoin utility and RWA issuance if the bill (or similar language) advances. Primary keywords: Coinbase, Digital Asset Market Structure Act, Senate crypto bill. Secondary/semantic keywords: tokenized equities, DeFi regulation, stablecoin rewards, CFTC, RWA.
Bearish
The news increases regulatory uncertainty and threatens specific revenue and product lines. Coinbase’s public withdrawal of support signals strong industry opposition to the bill’s current draft, raising the chance that restrictive provisions (a de facto ban on tokenized equities, heavy DeFi compliance obligations, and limits on stablecoin yields) could either be reintroduced in future legislation or negotiated with concessions. Short term: heightened uncertainty likely causes negative sentiment across related markets—tokenized‑asset plays, stablecoin‑utility protocols and projects tied to on‑chain RWA issuance may see selling pressure or paused activity. Trading desks may reduce exposure to tokens tied to tokenization platforms and stablecoin yield mechanisms until clarity improves. Long term: if the bill is substantially revised or dies, impact could be neutral or mixed; removal of hostile language would be bullish for tokenized equities and DeFi innovation, while permanent adoption of restrictive provisions would be structurally negative. Overall, immediate market reaction should be bearish for tokens most directly exposed to tokenization, stablecoin yields and DeFi developer activity.