- Armstrong urges urgent U.S. crypto laws as Trump-linked stablecoin gains global traction.
- GENIUS and FIT21 bills face Senate resistance over security and compliance concerns.
- Lawmakers risk losing stablecoin market to offshore or politically linked issuers.
Coinbase CEO Brian Armstrong has called on Congress to finalize legislation governing stablecoins and crypto market structure, urging quick action before August 2025. In a recent statement, Armstrong described the upcoming months as a small window to pass regulatory clarity or risk losing control of the rapidly growing digital asset market.
The call comes as lawmakers weigh competing proposals while a politically linked stablecoin gains momentum abroad. Armstrong highlighted the Financial Innovation and Technology for the 21st Century Act (FIT21) and the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act. Both bills aim to establish a federal framework for the $240 billion stablecoin industry, which is currently dominated by Tether’s USDT and Circle’s USD Coin.
Two Federal Bills Advance Amid Political Scrutiny
The FIT21 bill seeks to define regulatory jurisdiction between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) and outline rules for market structure involving digital assets. Although initially rejected by Congress in May 2024, the House has since revived it with a revised discussion draft.
In addition to FIT21, the GENIUS Act includes clear licensing, reserve, and audit requirements for stablecoin issuers. The GENIUS bill has gone farther in Congress than another competing bill, the STABLE Act, but is stuck in the Senate. The measure requires at least 60 votes for passage, but nine Senate Democrats said Wednesday they objected, saying there are not enough safeguards against anti-money laundering and national security.
While both chambers still have work left to do, Armstrong welcomed the renewed momentum in the House. Meanwhile, he has called on the lawmakers to present a clear and enforceable policy framework to help the US retain its leadership in digital finance.
Trump-Linked Stablecoin Raises Influence Concerns
As congressional debate continues, attention has turned to USD1, a stablecoin launched by World Liberty Financial, a company tied to President Donald Trump’s family. USD1 recently became the subject of political scrutiny after Abu Dhabi’s state-backed MGX announced plans to use the token for a $2 billion investment in Binance.
The deal was jointly announced at a Dubai crypto event by Eric Trump and Zach Witkoff, a co-founder of World Liberty Financial. The announcement added that U.S. Treasuries and cash equivalents fully back USD1 and fully comply with U.S. laws.
However, a U.S. Senate group has questioned the legality and ethics of the Trump-linked digital asset. They wrote in a letter to the Office of Government Ethics that perks for holders of the TRUMP token, including an opportunity to visit the White House, potentially violate federal ethics laws, or that foreigners could use the offering to try to gain influence on the Trump administration.
Regulatory Delay May Push Innovation Abroad
Armstrong’s warning reflects broader industry worries that delayed legislation could lead to innovation and capital moving to other jurisdictions. The lack of federal oversight could open the door for stablecoins with political allegiances or based offshore to develop unfettered, as these compliance-focused platforms look for clear rules.
The Biden administration continues to focus on the GENIUS and STABLE Acts. However, analysts note that consensus is falling behind other financial hubs that have already implemented licensing for stablecoin issuers.
