Coinbase CEO has become Wall Street's public enemy number one

Jan 30, 2026 22:00:18

Share to

Original Title: The Crypto CEO Who's Become Enemy No. 1 on Wall Street

Original Authors: Amrith Ramkumar, Dylan Tokar, Gina Heeb, The Wall Street Journal

Original Translation: Luffy, Foresight News

Last week during the World Economic Forum in Davos, Brian Armstrong, the CEO of the largest cryptocurrency platform in the U.S., Coinbase, was having coffee with former British Prime Minister Tony Blair when JPMorgan CEO Jamie Dimon suddenly interrupted their conversation.

"You’re talking nonsense," Jamie Dimon said, pointing directly at Brian Armstrong. This long-time skeptic of cryptocurrency had previously called Bitcoin a scam.

According to insiders, Jamie Dimon's main point was to demand that Brian Armstrong stop spreading false statements on television. Earlier that week, Brian Armstrong publicly accused the banking industry on several business television programs of trying to obstruct legislative efforts to establish a new regulatory framework for digital assets.

This confrontation was at odds with the Davos Forum's intention to promote cooperation among global leaders.

As cryptocurrency rapidly integrates into the mainstream of American finance, Wall Street giants have finally recognized the threat posed by this sector. Although banking institutions have accepted some applications of cryptocurrency, such as providing services for clients' Bitcoin investments and using digital assets to enhance the efficiency of fund transfers, they have drawn a clear line when it comes to their core business of personal deposits.

Currently, there is a fundamental disagreement between the banking industry and Coinbase on a key issue: whether cryptocurrency exchanges have the right to pay regular returns to users holding digital tokens. These so-called yield rewards refer to the ongoing fees paid to stablecoin holders, with interest rates around 3.5%.

Bank of America CEO Brian Moynihan, JPMorgan CEO Jamie Dimon

The banking industry believes that the returns paid by cryptocurrency exchanges to users are essentially no different from bank deposit interest. Since the interest rate on bank checking accounts is typically less than 0.1%, far below the yield levels of cryptocurrencies, the banking sector is concerned that consumers will move large amounts of money into the cryptocurrency market. They argue that this trend will severely impact community banks and affect the availability of corporate loans. Meanwhile, Brian Armstrong and other practitioners in the cryptocurrency industry believe that the market should follow the principles of free competition, and if banks want to compete with stablecoins, they can simply raise deposit rates or directly enter the stablecoin business.

The legislation known as the "Clarity Act" could reshape the future landscape of everyday financial services, covering core areas such as bank deposits and electronic payments.

According to insiders, to facilitate a compromise between both sides, the White House plans to convene talks between banking and cryptocurrency industry groups this Monday, with David Sacks, the Trump administration's commissioner for artificial intelligence and cryptocurrency affairs, expected to attend. Some insiders have indicated that Coinbase's U.S. policy head, Kara Calvert, is also on the attendee list.

43-year-old Brian Armstrong co-founded Coinbase in 2012 and has led the cryptocurrency industry in seeking legalization and mainstream recognition over the years. As the head of this company, valued at around $55 billion, Brian Armstrong holds significant influence in policy debates related to the industry, with the current legislative battle in Washington being one of them. "It’s better to have no bill than to have a bad one," he stated on social media platform X the day before a Senate committee was scheduled to vote on a bill that, if passed, would effectively prohibit companies like Coinbase from paying returns to customers or cost Coinbase billions. Just hours later, the vote was unexpectedly postponed, causing a stir throughout the financial community.

"The current situation is more interpreted as a confrontation between Coinbase and the banking industry, rather than a clash between the entire cryptocurrency industry and the banking sector," said Ron Hammond, policy and advocacy director at the well-known crypto market maker Wintermute.

Brian Armstrong's counterattack did not stop with the post on January 14. In subsequent television interviews, he reiterated his views, telling Bloomberg that bank lobbyists are "running around trying to shut down competitors" and accusing the banking industry of "using customers' deposits for lending without their substantial permission." Insiders described that these remarks led to several awkward encounters between him and multiple bank CEOs at the Davos Forum.

"If you want to do banking business, then just get a banking license," Brian Moynihan said during a 30-minute meeting with Brian Armstrong at the main exhibition center in Davos last week. The atmosphere of the meeting was relatively friendly, but the communication remained somewhat stiff.

Citigroup CEO Jane Fraser gave Brian Armstrong less than a minute of conversation time. Coinbase is a client of Citigroup and JPMorgan, and has established business relationships with several other banks.

Wells Fargo CEO Charlie Scharf was even less willing to spare a minute. When Brian Armstrong approached him, Charlie Scharf bluntly stated that there was nothing to discuss between them. This conversation occurred while Jamie Dimon, Charlie Scharf's former boss, was not far away.

Aspiring to "Replace Traditional Banks"

Brian Armstrong graduated from Rice University in Houston, majoring in economics and computer science, and is an early advocate of digital currency concepts and underlying blockchain technology. He studied the original Bitcoin white paper published in 2008 by the mysterious figure Satoshi Nakamoto, and during his time at Airbnb in 2011, he encountered numerous inconveniences when transferring money to South America.

These experiences laid the groundwork for him to establish Coinbase. At that time, many investors were eager to enter the cryptocurrency market but faced a core problem: there was no dedicated platform to store digital assets. The founding of Coinbase was aimed at solving this issue, and when some customers wanted to trade Bitcoin rather than just hold assets, Coinbase naturally transformed into a cryptocurrency exchange.

Coinbase started in a small apartment in San Francisco, which was also the company's first office. After another co-founder left in 2017, Brian Armstrong became the undisputed leader.

Several former colleagues interviewed by The Wall Street Journal described Brian Armstrong as shy, sometimes even struggling to communicate smoothly with some employees, and appearing uneasy when reprimanding subordinates. Some former employees characterized his style as reminiscent of the Vulcans from "Star Trek," an alien race known for their calm restraint and emotional detachment.

In 2014, Coinbase CEO Brian Armstrong speaks on stage at the TechCrunch Disrupt Europe conference in London

However, Brian Armstrong has never wavered in his vision for the development of Coinbase. He positions Coinbase as a benchmark company for promoting the integration of cryptocurrency into the mainstream market in the U.S., and today, Coinbase's business scope has expanded to include electronic payments, stock trading, commodity trading, and prediction markets.

"Our ultimate goal is to become a substitute for traditional banks in people's eyes," he stated in an interview with Fox Business last year. "We want to create a super financial application that provides users with various financial services."

As the business landscape continues to expand, Brian Armstrong has invested millions of dollars to build the largest lobbying team in the cryptocurrency industry. After experiencing several rounds of boom and bust in the cryptocurrency sector, Coinbase went public in April 2021, with its market value briefly exceeding $100 billion, and Brian Armstrong's personal stake reaching approximately $13 billion.

In 2021, Coinbase employees celebrate the company's IPO outside the Nasdaq stock exchange in New York with champagne

After surviving the industry's collapse in 2022 and withstanding regulatory pressure from the Biden administration in 2023, Brian Armstrong began to launch counterattacks and gradually found his voice. This manager, who once preferred to wear headphones while coding in the office and was reluctant to speak publicly, has now become a steadfast spokesperson for the cryptocurrency industry in Washington, where attitudes toward cryptocurrency are about to undergo a dramatic change.

Coinbase has invested approximately $75 million in a series of super political action committees for the 2024 U.S. elections, aiming to oppose candidates who are skeptical of cryptocurrency, while also establishing grassroots organizations to garner public support for cryptocurrency-related legislation. This super political action committee announced this Wednesday that its funding has now reached $193 million.

If Trump wins the 2024 election, it would open a window for Brian Armstrong to achieve policy breakthroughs that has been waiting for ten years. He praised Trump for ushering in "the dawn of a new era for cryptocurrency" and attended a "cryptocurrency gala" during Trump's inauguration, which featured Snoop Dogg. Now, this executive changes out of his usual T-shirt and black jacket into formal attire to visit Capitol Hill at least every two months.

"In the U.S., Coinbase is at the forefront of all matters related to cryptocurrency," said Anthony Scaramucci, founder of SkyBridge Capital and a long-time cryptocurrency investor.

Last summer, Trump signed the "Genius Act," clearing the way for many companies to issue stablecoins, which directly spurred explosive growth in the stablecoin business. The act prohibits stablecoin issuers from paying interest to users, but does not impose restrictions on exchanges like Coinbase or third-party institutions. The banking industry views this oversight as a legal loophole, which directly triggered the fierce battle surrounding the "Clarity Act."

A Long Legislative Journey

The U.S. House of Representatives passed its version of the "Clarity Act" last year, but advancing the bill in the Senate is considered extremely difficult, partly due to disagreements among lawmakers over the regulatory rules that cryptocurrency companies should follow. The Senate Agriculture Committee, responsible for legislation related to the Commodity Futures Trading Commission, passed its version of the bill draft this Thursday. Lawmakers ultimately need to push a version of the bill through the full Senate and then negotiate with the House to resolve differences between versions.

According to insiders, Brian Moynihan expressed to Brian Armstrong the core point: if cryptocurrency companies like Coinbase wish to provide deposit-like services, the banking industry generally believes that these companies should accept the same regulatory constraints as traditional banks. Regulatory agencies such as the U.S. Federal Reserve and the Office of the Comptroller of the Currency conduct strict reviews of banks' risk conditions, regularly inspect their operations, and establish clear rules for banks' capital requirements for lending and investment activities.

"This controversy over yield rewards is indeed an exception in our cooperative relationship with the banking industry. We maintain close cooperation with several banks and have announced multiple cooperation plans," said Faryar Shirzad, Coinbase's chief policy officer.

Coinbase has established a lucrative partnership with stablecoin issuer Circle, allowing Coinbase to earn substantial revenue shares from the popular stablecoin USDC. Unlike other companies in the cryptocurrency industry, Coinbase pays some USDC holders a 3.5% yield reward based on this exclusive partnership. The company stated that these incentives help attract users and provide consumers with more options in a time when bank checking account interest rates are extremely low.

"There is no reason to prohibit paying interest to consumers," Brian Armstrong stated in an interview with The Wall Street Journal last year.

Brian Armstrong speaks to the media on Capitol Hill

As the "Clarity Act" is about to enter the voting phase in Congress, the banking industry has begun intense lobbying activities behind the scenes. They cited a government estimate warning senators that approximately $6.6 trillion in deposits in the traditional financial system could be at risk of being diverted to the cryptocurrency market. This lobbying has achieved significant results, as the nearly 300-page bill draft includes several provisions and potential amendments that Brian Armstrong believes are detrimental to the cryptocurrency industry. He subsequently withdrew his support for the bill, and just hours later, Tim Scott, the chairman of the Senate Banking Committee and a Republican senator from South Carolina, announced the cancellation of the vote.

According to insiders, Brian Armstrong has proposed his own solution to the current deadlock. He suggested to Brian Moynihan the establishment of a new category of stablecoin issuers that, if they can meet stricter regulatory standards, would be allowed to pay yield rewards to users. This proposal theoretically allows the banking industry and Coinbase to compete fairly in the stablecoin business. Others have suggested that most yield reward payments could be prohibited, with only a narrow range of exemptions defined for a few companies like Coinbase.

Any advancement of a solution relies on Brian Armstrong's support.

"Now, the fate of this bill is believed to be in Coinbase's hands," said Hilary Allen, a law professor and securities law expert at American University, who is also a cryptocurrency skeptic. "This is truly shocking."