Coinbase recently backed out of a significant US Senate crypto bill, claiming it was a bank lobbyist trap that would stifle the expansion of the sector. They claim that the bill changed from “regulatory clarity” to “Wall Street protection racket” as a result of significant pressure from traditional banks behind closed doors. This seems to be an open conflict between the banking cartel and cryptocurrency platforms.
Coinbase has consistently promoted reasonable regulations that allow companies to operate securely while eliminating fraud. They supported this bill early on because it promised to provide everyone with clarity by finally defining digital assets under US law. Now, though? According to Coinbase, recent drafts hurt cryptocurrency companies while allowing banks to get away with it.
Banks acting unethically
The worst part is that Coinbase accuses banks of engaging in backroom lobbying. Not “consumer protection,” but defense of dominance. Banks suffered from capital controls, wire fees, and ACH delays for decades. Crypto offers self-custody, DeFi yields, and instantaneous worldwide transfers at pennies. Given that stablecoin volumes are comparable to Visa, it makes sense that they are anxious.
What most likely changed
Although there isn’t a public clause-by-clause yet, warning signs abound:
Small exchanges are going bankrupt due to KYC/AML overkill.
Banks are not classified as “systemic risk”
Self-reliance DeFi was destroyed by custody orders.
Bans on stablecoin yields
$50 million in compliance kills small startups first. Inovation stalls as the big dogs (Coinbase, Binance.US) pool their resources.
“FTX!” exclaim regulators.
Fair—confidence was shaken by crypto scandals. Rug pulls abound, Celsius bankruptcy, and FTX collapse. The CFTC and SEC seek to protect consumers. Issue? Legitimate players are killed when the entire industry is painted with an SBF brush. We didn’t outlaw banking in 2008; banks survived.
The ripple effect
Coinbase, the biggest US exchange and Armstrong’s DC warrior, fluctuates in value. Gemini probably follows Kraken. Bill stalls or demands a rewrite. Coinbase intensifies lobbying through stores, advertisements, and a Hill blitz.
Worldwide stakes
Hostile rules, US sets the tone?
Europe (MiCA) takes over.
Dubai and Singapore have terrible talent.
Innovation in the US is escaping to other countries.
The core battle
Control, not technology. Programmable money in vaults is what banks want. Borderless rails are what cryptocurrency wants. The winner is chosen by Bill.
The following sixty days
Armstrong vs. bank CEOs in a Senate cage match
40 million voters are mobilized by crypto PACs
Midterms are approaching—innovation kills
Drafts of compromises for spring 2026
Conclusion
Instead of regulation, Coinbase sees a bank power grab. Calling it mobilizes troops but risks anger. Crypto is now widely used—institutional billions, $2T cap. Banks cannot bully if they don’t get backlash.
Keep an eye on Senate Finance. Does cryptocurrency hold? rules that are feasible. Do banks win? Innovation runs away. Similar to how taxis battled Uber, banks are fighting cryptocurrency. Who wins is determined by history.
