Banks Weigh In On Stablecoins

Talks in Davos between major banks and Coinbase over the coinbase crypto bill signal a new phase in how traditional finance approaches digital assets.

Coinbase engages Wall Street banks at Davos

Brian Armstrong, CEO of Coinbase, has confirmed that the exchange is working closely with leading U.S. banks on a new crypto market structure bill. He shared the update during a meeting with top bank chief executives at the World Economic Forum in Davos, underscoring how political and financial elites are now directly involved.

Armstrong said the objective is to move the U.S. digital asset industry forward by securing clear, enforceable rules. Moreover, he stressed that cooperation with banks could provide the regulatory certainty that institutions have been demanding before committing substantial capital to crypto markets.

A central topic in Davos was stablecoins, widely seen as a bridge between traditional finance and crypto adoption. However, the discussions also touched on how banks can safely participate without taking on undue regulatory or balance sheet risk.

Focus on stablecoin rules and bank concerns

Stablecoins are digital tokens that typically track the value of the U.S. dollar. Armstrong argued that a robust stablecoin regulatory framework would help banks feel more comfortable entering the sector, as they could rely on standardized rules around reserves, disclosures, and risk management.

He plans to negotiate directly with bank executives on key stablecoin issues before taking any formal proposals back to U.S. lawmakers. That said, banks are expected to raise concerns over compliance, liquidity, and consumer protection, which regulators in Washington have also prioritized.

According to recent reports from The Block and Tech in Asia, the draft bill aims to deliver long-needed clarity to the broader U.S. crypto market structure. Lawmakers have repeatedly delayed concrete action in past sessions of Congress. However, industry leaders argue that visible bank cooperation could finally accelerate the process.

Why bank support is critical for crypto regulation

Banks remain central to the U.S. financial system, from payments to capital markets. Without their support, broad-based crypto adoption is likely to remain fragmented. If major institutions agree on shared standards for stablecoins, the legislation could unlock significant institutional capital and deepen liquidity across trading venues.

For Coinbase, working with banks is a calculated strategy. Moreover, rather than positioning itself against legacy finance, the exchange is choosing collaboration, hoping that alignment with established players will ease regulatory frictions and reduce political resistance to new crypto rules.

This approach could help digital assets gain legitimacy in the eyes of regulators and large investors. However, it also raises questions about how far the sector is willing to adapt to banking norms, including stringent compliance obligations and intensive supervision.

Mixed reactions from the crypto community

The crypto community has responded with mixed views to Armstrong’s outreach at Davos. Some market participants see closer ties with banks as a necessary step toward crypto industry mainstream adoption, arguing that smart regulation can protect users and draw in long-term capital.

Others remain skeptical. Critics warn that as banks gain influence over stablecoins and core infrastructure, they could shape the market in ways that prioritize their own interests. Moreover, they fear that decentralization may erode if large financial institutions end up controlling the primary on- and off-ramps.

For these critics, heavy bank involvement risks turning open crypto networks into something that resembles existing payment rails, where access and innovation are heavily intermediated.

Next steps for the coinbase crypto bill and stablecoin talks

The coinbase crypto bill is still under discussion, and no final decisions have been made. Armstrong’s comments, however, indicate that negotiations with bank CEOs are moving beyond exploratory conversations and toward more concrete policy proposals.

If banks and crypto firms can reach common ground on stablecoin standards, lawmakers in Washington may feel more confident pushing legislation forward. Furthermore, alignment on issues such as reserve backing, disclosure rules, and supervision could become a template for future digital asset regulation.

For now, Coinbase’s move highlights a strategic shift in how the industry engages with traditional finance. Instead of building in isolation, leading players are trying to reshape the financial system from within, even if that route remains controversial among long-time crypto advocates.

In summary, the Davos meetings between Coinbase and major banks show how regulatory clarity around stablecoins and broader crypto rules is becoming a shared priority, with the outcome likely to shape U.S. digital asset markets for years to come.