Coinbase CEO Brian Armstrong expressed optimism about stablecoin legislation passing the U.S. Senate amid ongoing pushback from critics. The GENIUS Act, aimed at regulating payment stablecoins, has seen bipartisan progress but faces hurdles over consumer protections and industry competition.
Armstrong’s Optimistic Outlook
Brian Armstrong voiced confidence during a Yahoo Finance interview in Washington, D.C., stating he is “optimistic” the bill could pass soon despite recent Democratic resistance. He highlighted urgency from both parties, noting, “I actually pretty this bill get done,” amid efforts to finalize rules for stablecoins pegged to assets like the U.S. dollar. Armstrong emphasized the need for clear regulations to foster innovation without overly broad anti-money laundering (AML) rules on decentralized finance (DeFi).
Background on GENIUS Act
The GENIUS Act (S. 1582) establishes a federal framework for “payment stablecoins,” requiring 100% backing with segregated high-quality assets like U.S. dollars, short-term Treasuries, and money market funds. Issuers fall into categories: subsidiaries of insured banks, federal-qualified nonbanks regulated by the OCC, or state-qualified entities, with nonbanks over $10 billion in issuance shifting to federal oversight. The bill prohibits yield-bearing stablecoins, commingling reserves, and restricts nonfinancial public companies like Big Tech from issuing without special approval, aiming to balance innovation and stability.
Legislative Progress and Setbacks
The Senate advanced the bill in May 2025 with a 66-32 cloture vote after Democratic amendments strengthened consumer protections and ethics rules. It passed fully on June 17, 2025, by 68-30, with 18 Democrats joining Republicans, sending it to the House. Earlier, a procedural vote failed due to Democratic concerns over potential benefits to President Trump’s family crypto ventures and systemic risks. Senators like Kirsten Gillibrand praised updates for robust bankruptcy safeguards without targeting individuals.
Key Points of Contention
Pushback centers on interest payments to holders, with banks and consumer groups arguing it could drain trillions in deposits from the system. Armstrong advocates allowing rewards for competition, criticizing bank lobbying and stating, “Crypto a technology update the system, we want every bank, fintech company, and every payment company to be integrated.” Critics, including Sen. Josh Hawley, called it a “huge giveaway to Big Tech,” while Democrats raised AML, consumer protection, and conflicts of interest. The bill mandates AML compliance but avoids overreach into DeFi, per Armstrong’s stance.
Industry and Stakeholder Reactions
Crypto firms like Coinbase view passage as legitimizing stablecoins for mainstream payments, potentially handling a large share of transactions. Banks oppose yield features but may launch their own stablecoins under the rules. President Trump and the industry back it, with White House support signaled post-Senate passage. Coinbase has no plans for a banking license unless laws change. Recent 2026 updates show banks pushing Treasury for strict interpretations banning rewards.
Implications for Stablecoin Market
Stablecoins like USDC and USDT could gain regulatory clarity, boosting adoption in payments and DeFi. The framework excludes algorithmic stablecoins, focusing on fiat-backed ones for safety. Post-passage, issuers adapted with compliant blockchains, attracting institutional capital. Armstrong predicts stablecoins will dominate economic transactions, urging a level playing field. Challenges persist in enforcing against illicit use via privacy tools.
Broader Crypto Regulatory Context
The GENIUS Act pairs with efforts like the CLARITY Act for market structure, resolving SEC-CFTC overlaps. Senate Banking Committee markup on CLARITY is set for January 15, 2026, amid DeFi debates. Armstrong supports separate stablecoin rules over bundling with broader bills. Industry lobbying has poured millions into Washington for legitimacy. Ethereum co-founder Joe Lubin called it a “new financial revolution.”
Future Outlook and Challenges
Despite Senate passage, House reconciliation with the STABLE Act addresses timelines and foreign issuers. Effective within 18 months, it demands compliance investments reshaping startups. Ongoing bank pressure against reopening for yield bans tests the framework. Armstrong warns reopening the GENIUS Act is a “red line,” stressing U.S. competitiveness. Bipartisan momentum suggests potential law by early 2026, enhancing crypto’s role in finance.