Galaxy CEO Novogratz Urges Progress As Coinbase Rejects Crypto Bill

TLDR

• Galaxy’s Novogratz supports advancing crypto legislation even if it’s not perfect.
• Coinbase withdrew support over issues with DeFi, stablecoins, and SEC authority.
• The crypto bill’s latest draft could end several Coinbase product lines.
• The Senate Banking Committee postponed its crypto hearing after Coinbase’s move.

Galaxy Digital CEO Michael Novogratz is urging lawmakers to move forward with long-awaited cryptocurrency legislation, even if the bill isn’t perfect. As major industry players like Coinbase pull their support over concerns with stablecoin rewards and DeFi restrictions, Novogratz argues that regulation is essential for the industry’s future. He believes that compromises can be made later, but passing a bill now is key to supporting growth and stability in the crypto sector.

Novogratz Pushes for Quick Legislation

Michael Novogratz, CEO of Galaxy Digital, has urged lawmakers to finalize cryptocurrency market structure legislation, even if it lacks perfection. Speaking on CNBC, Novogratz said, “We got to get this bill passed so we can move on and the industry can start growing.”

He emphasized the need to act swiftly, suggesting that issues in the bill could be addressed later. “If it’s not perfect, who cares? We’ll fix it in time,” he added. He believes reaching a compromise on contested topics like stablecoin rewards is achievable.

The legislation in question could be finalized in the coming weeks. It aims to provide a legal framework for cryptocurrencies and their trading platforms in the U.S.

Coinbase Withdraws Support over Concerns

Coinbase, one of the largest U.S.-based cryptocurrency exchanges, has publicly withdrawn its support for the bill’s latest draft. CEO Brian Armstrong announced the decision on social media, expressing serious concerns about key sections of the proposal.

Armstrong outlined four primary issues: treatment of tokenized equities, DeFi restrictions, the elimination of stablecoin rewards, and the SEC’s regulatory role. He stated, “Frankly, I’d rather have no bill than a bad bill.”

In an interview with CNBC, Armstrong added that the proposed changes could eliminate “three or four different product lines” Coinbase currently operates. He said the draft appeared to benefit traditional banks while harming innovative crypto firms.

Legislative Process Faces Delays

The Senate Banking Committee had scheduled a markup session for the bill on Thursday. However, following Coinbase’s announcement, the hearing was postponed indefinitely. A new date has not been set.

More than 70 amendments were filed after the updated 270-page draft was released on Monday night. Staff from the Senate Agriculture and Banking Committees are expected to speak with crypto industry leaders during a scheduled Friday call.

This follows months of debate around the GENIUS stablecoin law passed over the summer. That law restricts issuers from paying interest to stablecoin holders but allows third-party platforms to offer rewards. The new bill may change that, which has led to concern from crypto companies.

Industry Remains Divided on the Path Forward

The crypto industry appears split on how to move forward. Some leaders, including Novogratz, argue that the U.S. needs a regulatory framework as soon as possible. Others, like Armstrong, believe the current draft poses too many risks.

Novogratz acknowledged that the compromise might not be ideal but stressed that passing a framework is essential. “I don’t think it will be great for crypto, but I think it’ll be fine,” he said.

Coinbase’s decision carries weight as the company has gained influence in Washington. However, its opposition may slow progress on the bill unless further revisions are made.

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