Coinbase CEO Armstrong: Dual Implementation of Crypto Regulation
Coinbase CEO Brian Armstrong stated in a CNBC interview that U.S. crypto regulation will move forward regardless of whether the Senate votes on the Clarity Act on September 15. Armstrong indicated that if the bill passes, it will become law; if it does not, the SEC and CFTC are prepared to issue rulemaking, providing regulatory clarity to the industry on the day of the vote or within a couple of days thereafter. The bill, formally known as the Digital Asset Market Clarity Act, aims to assign securities tokens to the SEC and decentralized commodities like Bitcoin to the CFTC.
He mentioned that the "must-address issues" previously raised by Coinbase have now been resolved, and the bill has incorporated hundreds of pages of bipartisan input, with support from law enforcement agencies, banks, and crypto companies. Senate Majority Leader John Thune has scheduled a procedural vote for September 15, requiring 60 votes to end debate, with the Republican party holding about 53 seats, needing at least 7 Democratic votes for bipartisan support.
The House passed the bill on July 2025 with a vote of 294 to 134, and the Senate Banking Committee sent it out of committee in May 2026 with a vote of 15 to 9. Controversial points previously included stablecoin rewards, ethical clauses for officials holding tokens, and jurisdictional divisions between the SEC and CFTC. Armstrong stated that both sides have achieved about 90% of their demands.
CFTC Chairman Mike Selig previously stated that even if legislation stalls, the agency will proceed with crypto market rules under its existing authority, with a timeline pointing to around September 16 after the vote. Armstrong positioned this pathway alongside the legislative route as "there will be clarity regardless."
In terms of market mechanisms, event-driven funds are concentrating on regulated exchanges and stablecoin issuers: the expectation of rule implementation is favorable for the valuations and product expansion of compliant platforms like Coinbase, Circle, and Bullish, while unregistered platforms relying on regulatory ambiguity for arbitrage and some banks' sensitive business will be under pressure. Before the vote, funds are priced based on "legislative success premium" and "regulatory rules safety net" rather than a one-sided bet that the bill will pass.
Prediction markets like Polymarket have recently seen a significant drop in the probability of the bill passing in 2026. COIN's stock price has fluctuated multiple times with news about the bill, and after a year-over-year decline in Q2 revenue, the market views September 15 as a binary policy event rather than merely a catalyst for trading volume.
Source: Public Information
ABAB AI Insight
Armstrong co-founded Coinbase in 2012 with Fred Ehrsam, starting with $150,000 from Y Combinator, and took the company public on Nasdaq in 2021. In 2023, the SEC sued Coinbase for operating an unregistered securities exchange, broker, and clearing agency, and Armstrong chose to confront rather than settle; after the SEC dropped the lawsuit in February 2025, he attributed the outcome to litigation strategy and a change in administration. During the same period, the company also faced a roughly $100 million penalty from NYDFS, a settlement with FinCEN/DOJ over anti-money laundering, and a class action lawsuit regarding disclosure of listing information. His regulatory approach is not to "wait for legislation" but to use litigation, lobbying, and established products to shift the battleground from the enforcement room to the legislative hall.
In terms of capital allocation, Coinbase is focusing resources on three fronts: profit-sharing with Circle's USDC, the largest Layer 2 on Ethereum called Base, and tokenized stocks from companies like Nvidia, Google, and MicroStrategy that are already live. Stablecoin rewards are a red line because they directly correspond to the exchange's ability to replace bank deposits; in January, Armstrong withdrew support for the bill due to lobbying clauses, stating he would prefer no legislation over accepting a version that "de-tokenizes stocks, restricts DeFi, compresses the CFTC, and prohibits stablecoin rewards." Money is not waiting for Congress to stamp approval but is first laid out on-chain for settlement, subscription products, and prediction markets, and then legislation is used to legitimize the already established business.
A similar path can be seen with Robinhood entering crypto spot and prediction markets with compliant licenses, Circle turning USDC into a regulated dollar channel, and Galaxy and Bullish betting on institutional custody and listed exchanges. The industry phase has shifted from "confronting enforcement" to "competing for rule-writing power": after the expansion phase ends, whoever can write products into the SEC/CFTC division text will lock in distribution channels. Jamie Dimon’s public opposition to stablecoin interest payments indicates that traditional banks view this clause as a structural threat rather than a product debate.
Structural judgments belong to the transfer of pricing power driven by regulatory changes. The mechanism is: legislative failure does not equal a vacuum; administrative agencies will immediately fill the gap with rules, and exchanges will preemptively establish tokenized securities, stablecoin rewards, and Layer 2 settlements as established facts, forcing rules to recognize rather than prohibit. Pricing power shifts from "SEC case enforcement" to "licenses + product lists," leading capital to transition from policy uncertainty discounts to license premiums, while unlicensed trading venues are pushed out of mainstream dollar liquidity.