Coinbase pushes U.S. crypto legislation in Davos meetings with banks

Coinbase CEO Brian Armstrong met top bank executives at Davos to advance U.S. crypto market legislation, following the company’s withdrawal of support from the Senate’s CLARITY Act due to concerns over stablecoins, DeFi rules, and SEC oversight.

Coinbase CEO Brian Armstrong took center stage at the World Economic Forum in Davos on January 20, 2026, meeting with leading U.S. bank executives to discuss the advancement of crypto market legislation in the United States. This move comes just days after Coinbase unexpectedly pulled its support from the Senate’s rewritten version of the CLARITY Act, forcing lawmakers to postpone a planned markup hearing on the bill.

Armstrong, in a video posted to X, outlined his agenda: to engage directly with banks and legislators to ensure a “win-win” solution for both traditional financial institutions and crypto companies. “We’re going to continue to work on the market structure legislation, and meet with some of the bank CEOs to figure out how we can make this a win-win,” Armstrong said. He emphasized the potential of stablecoins to foster collaboration between banks and crypto platforms, provided that both sides operate on a level playing field.

The CLARITY Act, first introduced in 2025, aims to define a comprehensive regulatory framework for digital assets in the U.S., covering tokenized equities, decentralized finance (DeFi) protocols, stablecoins, and broader oversight by the Securities and Exchange Commission (SEC). While the bill has strong bipartisan support in principle, Coinbase’s withdrawal highlighted significant points of contention, particularly for the crypto industry.

Why Coinbase Withdrew Support

Coinbase’s decision to withdraw support from the Senate draft was based on four major concerns:

Tokenized Equities Restrictions – The rewritten CLARITY Act would limit how crypto companies can issue tokenized stocks or securities, potentially slowing innovation in digital capital markets. Coinbase has long argued that tokenization can democratize access to financial instruments, allowing smaller investors to participate in opportunities traditionally reserved for institutional investors.

Expanded Government Access to DeFi Data – The draft bill includes provisions that give regulators broader access to DeFi transaction data. Coinbase and other crypto advocates argue that this approach undermines privacy, could stifle innovation in decentralized protocols, and might discourage adoption of blockchain-based services.

Broadened SEC Authority – The Senate version expands the SEC’s regulatory jurisdiction over a wider array of crypto products, including stablecoins, tokenized equities, and certain decentralized financial applications. Coinbase raised concerns that overreach could create legal uncertainty and expose platforms to potential litigation, slowing the growth of the U.S. crypto sector.

Stablecoin Yield Restrictions – One of the most contentious issues is the Senate draft’s prohibition on paying interest or yield to holders of stablecoins. Banks advocated for this rule, arguing that crypto platforms offering yield on stablecoin holdings could siphon deposits away from traditional savings accounts. Coinbase contends that yield-bearing stablecoins are a fundamental aspect of financial innovation in digital markets, allowing retail and institutional users to earn returns while maintaining liquidity and stability.

Coinbase withdrew its support just hours before the Senate Banking Committee was set to advance the bill, effectively pausing legislative momentum. The markup hearing has been postponed indefinitely, with no new date announced.

Armstrong’s Agenda at Davos

At the World Economic Forum, Armstrong engaged with leading bank CEOs to explore collaborative solutions for U.S. crypto regulation. He stressed that the objective should not be to pit banks against crypto firms but to establish a framework where both sectors can thrive.

Tokenization was a major topic of discussion. Armstrong pointed out that over four billion adults globally currently lack access to high-quality investment opportunities. He framed digital assets and tokenized financial products as tools to expand access, increase transparency, and lower the barriers to investing. By creating interoperable systems between traditional banks and crypto platforms, he argued, the U.S. could lead in global financial innovation while protecting consumers.

Stablecoins, Armstrong noted, represent a critical bridge between traditional finance and digital assets. Their use can enhance payments efficiency, facilitate cross-border transactions, and provide liquidity solutions for banks and crypto companies alike. However, he stressed that regulation must ensure fair treatment, without giving preferential treatment to one sector over the other.

Implications for the U.S. Crypto Market

Coinbase’s pause highlights the growing tension between regulators, traditional banks, and crypto platforms in Washington. On one hand, lawmakers and regulators aim to safeguard investors, maintain systemic stability, and ensure tax compliance. On the other, crypto advocates argue that overly prescriptive regulations can stifle innovation, drive businesses offshore, and hinder the United States’ global competitiveness in digital finance.

The stablecoin yield debate exemplifies this tension. While banks are concerned about potential disruptions to their deposit bases, crypto firms maintain that yield-bearing stablecoins are essential for decentralized financial ecosystems. Striking a balance that protects consumer interests without discouraging innovation is proving to be a complex challenge.

Expanding access to tokenized equities is another critical area. Crypto companies argue that tokenized securities can democratize finance, enabling small investors to access markets traditionally limited to institutions. However, regulators are wary of potential risks associated with market manipulation, investor protection, and liquidity concerns.

Next Steps in U.S. Crypto Regulation

Armstrong has indicated that discussions with bank CEOs will be brought back to the Senate and the Trump administration. He envisions a cooperative approach, where regulators, banks, and crypto firms jointly design rules that protect consumers, enhance transparency, and foster innovation.

While the CLARITY Act remains a focal point, broader discussions about the U.S. crypto market structure are expected to continue throughout 2026. These include the treatment of DeFi platforms, stablecoin issuance, digital asset custody, and taxation. Lawmakers are aware that decisions made now could determine whether the U.S. retains its leadership in the global digital finance sector.

Observers at Davos note that Armstrong’s efforts signal a strategic shift in how crypto firms engage with policymakers. Rather than simply lobbying for favorable rules, Coinbase is advocating a collaborative approach, bringing traditional financial institutions into the conversation to find mutually beneficial solutions.

Global Context

The U.S. approach to crypto regulation comes amid growing international competition. Countries such as Singapore, Switzerland, and the United Arab Emirates have enacted crypto-friendly frameworks, attracting startups and capital. Armstrong has emphasized that clear, predictable rules in the U.S. are essential to maintain competitiveness and prevent innovation from moving abroad.

He also highlighted the potential social benefits of tokenization. By broadening access to financial instruments through digital assets, underserved populations could participate in wealth creation, retirement planning, and small-scale investment opportunities that were previously inaccessible.

Challenges Ahead

Despite the constructive discussions, significant challenges remain. Regulators must reconcile competing priorities: ensuring consumer protection, preventing illicit activity, and maintaining financial stability while not stifling innovation. The Senate Banking Committee will need to revisit key points of contention, particularly stablecoin yield restrictions, tokenized equity issuance, and data access for DeFi transactions.

Crypto platforms, including Coinbase, will continue to advocate for clarity and predictability in the rules. Industry leaders warn that ambiguous legislation could create legal uncertainty, slow adoption of new technologies, and undermine confidence in U.S.-based crypto markets.

Coinbase CEO Brian Armstrong’s meetings with bank leaders at Davos mark a pivotal moment in the evolution of U.S. crypto regulation. By pausing support for the CLARITY Act, Coinbase signaled the importance of addressing structural issues, such as stablecoin yield rules, tokenized equities, and DeFi data access.

As discussions continue, Armstrong is promoting a collaborative vision where traditional banks and crypto platforms can coexist and mutually benefit. The outcome of these deliberations could shape the trajectory of the U.S. crypto market for years to come, determining whether America leads in digital finance or falls behind more agile global competitors.

The Davos dialogue underscores that effective crypto regulation requires a nuanced approach—balancing innovation, consumer protection, and financial stability while engaging all stakeholders in the design of the market framework.