DAVOS, Switzerland — A behind-the-scenes battle between the crypto industry and traditional banks and credit unions over U.S. crypto legislation has emerged as a key theme at this year’s World Economic Forum, with lobbying intensifying around the Senate’s proposed CLARITY Act, according to a new report.
In an interview with CNBC, Brian Armstrong, CEO of Coinbase, said banking trade groups are trying to block competition from crypto firms as lawmakers debate final language in the bill. “Their lobbying arms and their trade groups are coming in and trying to ban their competition,” Armstrong told CNBC.
As CNBC noted, ironically, Armstrong also reported that Coinbase is working with five of the top 20 banks in the world to provide basic crypto infrastructure services. According to Armstrong, the commercial side of these banks sees crypto as an opportunity.
As the CU Daily reported, Coinbase withdrew its support for the CLARITY Act last week after reviewing a draft, shortly before the Senate Banking Committee delayed its markup. Armstrong later wrote on X that he would prefer “no bill than a bad bill,” CNBC said.
What Bill Seeks to Do
The CLARITY Act is designed to define regulatory boundaries for the broader crypto market, building on last year’s GENIUS Act, which addressed stablecoins, CNBC reported. The bill would clarify whether crypto assets fall under securities or commodities law and provide protections for some developers.
Tensions have grown as crypto competes more directly with banks. CNBC reported that crypto lobby has become a political power player in Washington, distributing $133-million to pro-crypto candidates during the 2024 election cycle, $50 million of which came from Coinbase’s Fairshake super PAC.
‘Strayed from Original Philosophy’
“This battle between crypto exchanges like Coinbase and traditional financial institutions has shown just how far crypto has strayed from its original philosophy of disrupting both central and commercial banks,” CNBC said. “Bitcoin purists are becoming a smaller percentage of the overall crypto userbase, much of which now interacts with the sort of centralized, regulated intermediaries this technology was initially intended to disrupt.”
President Donald Trump said in Davos that Congress is working on crypto market structure legislation he hopes to sign soon, CNBC reported.
During the World Economic Forum, Sergio Ermotti, CEO of UBS, said he believes “blockchain and that kind of technology is the future for the traditional banking business. So, you will see a convergence, I bet.”
