Coinbase CEO Brian Armstrong Calls for Passage of Clarity Act

Coinbase CEO Brian Armstrong called on the Senate to pass the Clarity Act, following up on Treasury Secretary Scott Bessent’s call in a Wall Street Journal Op-Ed yesterday.

Armstrong’s move, in a Thursday evening tweet, is particularly relevant as he was the prime mover in holding up progress on the Act, withdrawing support for an earlier version a day before it was scheduled for markup by the Senate Banking Committee. That move by the biggest U.S. exchange caused the committee’s leadership to delay markup, a necessary step before sending the bill to the full Senate.

Armstrong’s opposition was based in large part on the earlier version’s ban on third parties like exchanges from offering yield — interest — on stablecoin holdings. Stablecoin issuers are already banned from offering yield.

The point has been the biggest hold-up blocking passage of the Clarity Act, which would regulate cryptocurrency in the U.S. The House has already passed a version of the Act.

Large and especially small banks have demanded a ban on offering yield on stablecoin holdings, fearing it would draw depositors away from banks, putting their ability to make loans at risk. 

Armstrong’s support suggests he is willing to support a deal proposed by a bipartisan pair of senators to overcome the hold-up. That would ban yield on passive stablecoin holdings, but allow it for activities that use stablecoins. 

Armstrong’s move comes as pressure has been building on him to support the deal. Industry insiders have expressed frustration at the delays, and even Bessent took what could be seen as a swipe at him in the April 9 Op-Ed.

In it, Bessent railed against “industry nihilists” opposing passage of the Clarity Act, saying the law is necessary to ensure America’s leadership in the crypto industry. 

While Bessent didn’t call anyone out by name, Armstrong’s original tweet announcing Coinbase’s opposition to the earlier version of the Clarity Act said, “we’d rather have no bill than a bad bill.”

He seems to have decided that the current proposal is good enough.