Coinbase CEO Brian Armstrong has publicly rejected the latest draft of the Digital Asset Market Structure Act. The highly influential crypto boss claims that it is "materially worse than the current status quo."
Armstrong concluded that the bill contained "too many issues" to be able to support it.
Notably, his scathing report was delivered just hours before the committee was set to vote. It is widely credited with forcing the indefinite delay of the markup.
Four dealbreakers
The first provision that Armstrong took issue with is a “de facto ban” on tokenized equities. The ban effectively kills the growing "Real World Asset" (RWA) space, making it challenging for companies to issue stocks or bonds on a blockchain.
Second, the bill reportedly contains strict prohibitions on decentralized finance (DeFi) that would grant the government "unlimited access" to user financial records. Armstrong has raised privacy-focused concerns.
Third, Armstrong claims that the bill could weaken the CFTC.
Lastly, the draft amendments would kill stablecoin rewards, which appears to be the main sticking point for Armstrong.
52% chance of passage
Coinbase withdrawing its support has caused a drop in the Polymarket odds. However, they remain above 50% despite the fallout.
Smart money likely views Coinbase CEO Brian Armstrong’s "rejection" as a bluff.
Traders assume that the White House will exert pressure on the Senate Banking Committee to compromise with the industry.
Confident diplomacy
In the meantime, Galaxy Digital CEO Mike Novogratz has adopted a stance of diplomatic optimism.
Novogratz urged the industry to remain calm, claiming that the setback was a normal part of the "tense" final stages of lawmaking.
"I have spoken to over 10 senators on both sides of the aisle in the past 24 hrs and I believe they all are working in good faith to get something done. Always gets tense at the end," he said.
Alex Dovbnya
Arman Shirinyan
Caroline Amosun