Coinbase CEO Brian Armstrong says the United States is likely to gain clearer cryptocurrency regulations regardless of whether the Senate passes the CLARITY Act, arguing that federal regulators are prepared to move ahead with their own rulemaking if Congress fails to approve the legislation.
Armstrong made the comments as the Senate prepares for a crucial September 15 procedural vote on the Digital Asset Market CLARITY Act, a bill designed to establish clearer federal rules for cryptocurrency markets and divide regulatory responsibilities between the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC).
The Coinbase chief said that passage of the bill would be the preferred outcome, but he does not believe its failure would leave the industry in the regulatory uncertainty that has characterized the U.S. crypto market for years.
Armstrong says crypto regulation will move forward
Speaking to CNBC, Armstrong said the crypto industry would obtain regulatory clarity either through legislation or through action by federal agencies.
His argument is based on statements from the SEC and CFTC that they are prepared to develop cryptocurrency rules if Congress does not advance the CLARITY Act.
“If it passes, great, we've got legislation,” Armstrong said, according to CoinDesk. He added that if the bill fails, the SEC and CFTC are prepared to publish rulemaking shortly afterward.
That means Armstrong sees the September 15 vote as important but not necessarily decisive for the industry's broader regulatory future.
The distinction is significant because congressional legislation and agency rulemaking do not carry exactly the same legal and policy implications.
A law passed by Congress would establish statutory requirements that regulators would then administer, while agency rules would operate within the authority granted to those agencies by existing laws.
The CLARITY Act faces a major Senate test
The Digital Asset Market CLARITY Act is designed to provide a federal market-structure framework for digital assets.
Among other provisions, it seeks to clarify when cryptocurrencies fall under SEC oversight and when digital commodities should instead be regulated by the CFTC.
The bill would also establish requirements for cryptocurrency exchanges, brokers and other market participants.
Supporters argue that the existing system has left companies unsure about which rules apply to different digital assets.
The crypto industry has particularly criticized the SEC's approach during previous administrations, arguing that enforcement actions and lawsuits created uncertainty without providing clear rules for businesses.
The CLARITY Act is intended to replace much of that uncertainty with a defined regulatory framework.
Senate Republicans released an updated version
Armstrong's comments came just as Senate Republicans released an updated version of the legislation following negotiations during the August congressional recess.
The revised bill runs roughly 630 pages and incorporates more than 100 provisions requested by Democrats, according to reporting on the latest draft.
The changes include provisions addressing decentralized finance, or DeFi, as well as cryptocurrency activities by credit unions and the application of banking and anti-money-laundering requirements.
However, significant disagreements remain, particularly over ethics provisions concerning elected officials and cryptocurrency holdings.
The Senate needs bipartisan support to advance the legislation because the procedural vote requires 60 votes.
That means Republicans cannot simply pass the bill with their own members if Democrats remain opposed.
Ethics rules remain a sticking point
One of the most difficult issues in the negotiations concerns cryptocurrency-related conflicts of interest involving government officials.
Democrats have demanded stronger restrictions on elected officials who own or benefit from digital assets.
The issue has received particular attention because President Donald Trump and members of his family have extensive cryptocurrency interests.
Armstrong said the two sides were still negotiating the ethics provisions but suggested that Republicans and Democrats appeared relatively close to an agreement.
The White House has already proposed ethics restrictions, but some Democrats have pushed for stronger requirements, including potential divestment from certain digital assets.
The dispute illustrates why passing the CLARITY Act has proven more difficult than simply reaching agreement on technical cryptocurrency regulation.
What happens if the bill fails?
If the Senate cannot advance the CLARITY Act, Armstrong expects the SEC and CFTC to begin or accelerate their own regulatory processes.
That could give cryptocurrency companies more guidance on how federal regulators intend to classify and supervise digital assets.
According to Armstrong, the agencies' readiness means the industry could see regulatory developments within days of the Senate vote.
However, agency rulemaking would not necessarily be a complete substitute for legislation.
The CLARITY Act would give Congress the opportunity to establish a comprehensive statutory framework covering the digital-asset market.
Regulations issued by the SEC or CFTC would instead operate within existing federal laws and the agencies' legal authority.
That difference could affect how durable the new rules are and how much authority regulators ultimately have.
Coinbase wants clearer rules
For Coinbase, regulatory clarity has major business implications.
The company operates one of the world's largest cryptocurrency exchanges and has repeatedly called for clearer U.S. rules governing digital assets.
Armstrong has argued that uncertainty makes it harder for companies to develop products and encourages some businesses to consider operating outside the United States.
A comprehensive framework could also make institutional investors more comfortable entering the cryptocurrency market.
Armstrong said passage of the CLARITY Act could serve as an important milestone for institutional adoption and potentially open the door to new products, including tokenized securities.
He has also argued that stronger rules would provide greater protection for consumers following major failures such as the collapse of FTX.
Banks and crypto companies have different concerns
The legislation has attracted support from major parts of the cryptocurrency industry, but traditional financial institutions have raised concerns about some of its provisions.
One major disagreement involves stablecoins.
Banks have argued that certain stablecoin reward programs could allow cryptocurrency companies to compete directly with bank deposits without being subject to comparable regulatory requirements.
Crypto companies counter that restrictions could prevent consumers from benefiting from new financial products and slow innovation.
The debate has contributed to intense lobbying in Washington.
Reuters reported that crypto advocates and banking organizations spent much of the August recess lobbying senators in their home states ahead of the vote.
The SEC and CFTC could play different roles
At the center of the CLARITY Act is the question of which federal regulator should oversee different parts of the cryptocurrency market.
The SEC traditionally oversees securities markets, while the CFTC regulates commodities and derivatives.
Cryptocurrency does not fit neatly into those traditional categories.
Bitcoin, for example, has generally been treated as a commodity, while some digital tokens have faced arguments over whether they qualify as securities.
The lack of a universally accepted framework has produced years of disputes between regulators and cryptocurrency companies.
The CLARITY Act seeks to establish clearer boundaries, with the SEC retaining authority over digital assets that qualify as securities and the CFTC receiving expanded authority over digital commodities.
That division is one of the reasons crypto companies have strongly supported the legislation.
Armstrong remains optimistic about the vote
Despite acknowledging that the bill could fail, Armstrong remains optimistic that lawmakers will eventually reach an agreement.
He said the legislation has received support from crypto companies, banks and law enforcement organizations and described negotiations as having produced significant bipartisan compromise.
He also said Coinbase's major concerns with the legislation had been addressed.
The remaining dispute over ethics provisions could therefore determine whether the bill receives enough Democratic support to clear the Senate's procedural hurdle.
The stakes for the U.S. crypto industry
The outcome of the CLARITY Act debate could shape the next phase of cryptocurrency development in the United States.
If the legislation passes, crypto companies would receive a federal statutory framework that could provide greater certainty over registration, trading, custody and regulatory oversight.
It could also encourage traditional financial institutions and institutional investors to increase their participation in digital assets.
If the bill fails, the SEC and CFTC could still move forward with their own rules, as Armstrong expects.
But that route could leave some major questions for Congress to resolve later.
The House of Representatives would also have to act before comprehensive legislation could reach the president.
The political calendar makes the situation more urgent. The 2026 midterm elections are approaching, and the House has a limited legislative schedule before voters go to the polls. Reuters reported that the crypto industry sees the current congressional window as particularly important because a change in political control could significantly alter the prospects for the legislation.
September 15 vote could determine the next step
The Senate's September 15 vote is therefore less about whether cryptocurrency regulation will exist at all and more about how that regulation will be established.
A successful vote would allow the CLARITY Act to proceed through the Senate legislative process.
A failed vote could shift attention immediately toward the SEC and CFTC and their ability to develop regulatory frameworks under existing law.
For Armstrong, either path represents progress compared with the uncertainty that has surrounded the U.S. cryptocurrency industry.
The Coinbase CEO's position also underscores the changing political environment around digital assets. After years of regulatory conflict, cryptocurrency has become a major issue in Washington, with lawmakers, financial institutions, regulators and industry groups all pushing for influence over the rules that will govern the market.
For now, the next major test comes on September 15.
Whether Congress creates the framework through the CLARITY Act or regulators move ahead independently, Armstrong believes the United States is finally moving toward clearer rules for cryptocurrency.
