Coinbase CEO Brian Armstrong believes the US Senate’s failure to advance the CLARITY Act could benefit his exchange by keeping major Wall Street firms from entering the crypto market under clearer rules.

The crypto executive still argued that the legislation would have helped the wider industry, even as he acknowledged that Coinbase could face less competition without it.

A Passed Bill Would Mean More Competition

In a September 20 interview with Scott Melker, the Coinbase chief explained that the bill’s failure could have a mixed effect on the company. While regulatory clarity could attract more traditional financial institutions to crypto, it would also open the door to new competitors.

“Every major financial services company in the world would have started integrating crypto with regulatory clarity. We would have had tons more competition,” Armstrong noted. “So in a way, honestly, it arguably could even be better for us to go under this path, because we’re one of the few companies who’s willing to go through that.”

The executive also revisited Coinbase’s objections to an earlier version of the legislation. The January draft raised concerns around tokenized equities, penalties for decentralized finance developers, the Commodity Futures Trading Commission’s authority over spot markets, and stablecoin rewards.

He maintained that those four issues had been addressed in the latest Senate draft, removing the objections Coinbase had previously raised.

The Senate vote on September 15 was procedural, not a final vote on the bill. It failed to advance by a 49-50 margin, falling short of the 60 votes required to proceed. Armstrong argued that the process could have allowed lawmakers to negotiate amendments and continue discussions.

You can hear more about what happened with the CLARITY vote in our video below.

Coinbase Turns to Regulators After Congress Stalls

With the legislation stalled, the exchange’s CEO said Coinbase could continue working with the SEC and CFTC as they develop rules for the industry.

“In the short term, it’s probably better for us in certain ways,” he told Melker. “It’s a little bit more permissive to have the SEC and CFTC do it.”

He is treating the bill as effectively dead unless lawmakers revive it, and as CryptoPotato reported earlier, seven Democratic senators have indicated that the setback does not mark the end of efforts to advance crypto legislation.

Armstrong’s comments came amid wider disagreement over how crypto regulation should address stablecoin rewards and the relationship between crypto firms and traditional banks. The GENIUS Act established a federal framework for payment stablecoins, but questions around competition with banks remain part of the debate.

He added that Coinbase was willing to work with the banks, rather than treating them solely as rivals.

Source: CryptoPotato