Written by: Techub News Compilation

Introduction

Recently, Coinbase co-founder and CEO Brian Armstrong accepted an in-depth interview on POLITICO's program "The Conversation." This dialogue took place against the backdrop of intense debates in Washington surrounding cryptocurrency regulation, with the central focus being the "Clarity Act" currently under review. The bill attempts to clarify whether cryptocurrencies and traditional banking should follow the same regulatory rules and is seen as a key battleground between the crypto industry and the traditional financial system on the political stage. As the leader of the world's largest cryptocurrency exchange and one of Washington's leading crypto lobbyists, Armstrong's statements directly reflect the industry's position and challenges at the legislative forefront, especially in light of his public disagreements with traditional banking giants, such as JPMorgan CEO Jamie Dimon, making this conversation particularly noteworthy.

Summary

• In response to Jamie Dimon's criticism of "being full of s--t," he expressed respect yet confusion, emphasizing that the core of the debate should be establishing clear regulatory rules rather than personal grievances.
• Explained the compromise nature of the Clarity Act, clarifying that crypto companies are not seeking looser regulations than banks, but rather that appropriate rules apply based on different business models (such as 100% reserve custody).
• Illustrated the bipartisan support base for cryptocurrencies: Democrats value its potential for financial inclusion, while Republicans focus on freedom, national security, and the competitiveness of the dollar.
• Looking to the future, he believes cryptocurrencies will refresh all aspects of the financial system and explored the long-term technological vision of the gradual merging of humans and AI.

Response to Dimon: Personal Attacks and Policy Nature

At the beginning of the interview, the host mentioned JPMorgan CEO Jamie Dimon's sharp criticism of Armstrong, who had openly called him "full of s--t" and questioned his ability to represent the entire crypto industry. In response, Armstrong first expressed his respect for Dimon, stating that JPMorgan is a great company, and Dimon himself has achieved remarkable results, from whom he has learned much about being a CEO. Hearing such remarks made him feel "a bit sad."

Armstrong quickly shifted the topic from personal matters to the core of policy. He emphasized that the essence of this debate is not about Jamie Dimon or himself, although the public enjoys focusing on this. The real key is how to establish clear rules in the U.S. so that the crypto industry can build here and benefit everyone. He believes that clear regulation is beneficial for American consumers, banks, and even the nation as a whole. He called for all parties to move beyond absolute confrontational language and work together to push the bill through.

Regarding why Dimon exhibits such strong personal hostility, Armstrong said he was "a bit confused." He believes that communication on media and social platforms often loses nuance. He prefers to resolve issues through one-on-one private exchanges and mentioned past opportunities to communicate with Dimon and his team. Armstrong pointed out that cryptocurrencies are currently one of the most bipartisan issues in Washington, not only supported by numerous bipartisan lawmakers but also backed by approximately 50 million Americans who have used cryptocurrencies and about 3 million advocates registered on the Stand With Crypto platform, hoping to elect candidates who support crypto. This represents a massive grassroots movement whose demand is simply to see clear rules written into law.

Clarity Act Disputes: Regulatory Balance and Industry Demands

The host pointed out that the core concern of traditional banks is that the Clarity Act may allow crypto companies like Coinbase to offer customers "rewards" similar to savings account interest, yet without adhering to the same strict rules and protections as banks. She asked why crypto companies should not follow the same rules as banks?

Armstrong first clarified a key point: the crypto industry is not asking for "looser rules". He explained that when building financial services companies, one can choose to obtain different types of licenses, which determines which products can be provided. For example, a banking license permits "fractional reserve lending," meaning banks do not have to hold all deposits but can lend them out and earn interest, but this comes with strict regulation due to the associated risks (like bank runs).

Coinbase chose a different path. They obtained a trust charter from the Office of the Comptroller of the Currency (OCC), which is a custody license that requires maintaining 100% reserves and does not involve fractional reserve lending. In this model, they can still process payments, pay rewards to customers, and allow customers to opt into certain lending products. Additionally, they hold other federal (e.g., CFTC, SEC) and state licenses regarding trading activities. Armstrong emphasized that if they wished to engage in fractional reserve lending, they would seek a banking license, but that is not necessary. He even mentioned that banks could operate like Coinbase with 100% reserves if they chose to give up their banking licenses.

Regarding the specific controversy over "stablecoin rewards" in the Clarity Act, Armstrong reviewed the legislative process. He noted that the principle allowing users to earn rewards on their balances has become law through the bipartisan vote in Congress on the "21st Century Act" (GENIUS Act). He believes this is a good thing, as Americans should be able to earn more from their money, especially since the stablecoins under this bill are backed by short-term U.S. Treasury bonds, which are low-risk and require 100% reserves.

However, banking lobbyists vehemently opposed this, raising concerns about "deposit outflows," although Armstrong claimed there is no evidence supporting this (as bank deposits have grown alongside the increase in stablecoins). As a compromise, the Senate Banking Committee proposed a solution: to retain the core concept of "Americans earning rewards from their funds," but prohibit rewards for "idle balances." Armstrong stated that while Coinbase does not like this restriction and believes it is not beneficial for America, they accepted this concession to reach a deal. Additionally, banking lobbyists secured many other provisions in the bill, such as additional rule-making authority, anti-evasion language, stablecoin disclosure requirements, marketing restrictions, etc. Armstrong believes that the banks have already received most of their demands, and now they should support this negotiated compromise.

The Political Dimension of Crypto: Bipartisan Support and Grassroots Power

Armstrong repeatedly emphasized that cryptocurrency is a bipartisan issue. He shared different points of focus when communicating with bipartisan lawmakers: Democratic lawmakers are excited about the financial inclusion potential of cryptocurrencies. About 80% of Americans feel that the current financial system does not serve them well, with high fees, long delays, and unequal opportunities, and cryptocurrencies serve as a powerful democratizing force in accessing financial services. Republican lawmakers, on the other hand, are more focused on the freedoms it guarantees, national security significance, and how to maintain the dollar's status as the global reserve currency (especially in competition with China), as they do not want to see this industry move overseas.

Furthermore, Armstrong pointed out that cryptocurrencies are also a generational issue, with major adopters aged between 15 and 35. Many lawmakers have told him that initially they did not understand cryptocurrencies, but their aides, children, or nieces and nephews use them and continuously send messages thanking them for their support of related legislation. The younger generation is becoming an important force for crypto advocacy.

When asked whether the lobbying power of crypto has caught up with or surpassed that of traditional banks, Armstrong avoided directly "scoring" and instead emphasized the scale of the grassroots movement. Three million Americans have expressed their desire to elect candidates who support crypto, and recently, they sent approximately one million contacts to legislators on a single issue. This reflects a widespread demand for updating the financial system.

Regarding the crypto super PAC "Fairshake," Armstrong stated that Coinbase supports it, but the organization operates independently, and he is not aware of its specific funding targets. Fairshake aims to support pro-crypto candidates in both parties. He cited former Senate Banking Committee Chairman Sherrod Brown, who may pay the price in elections for his long refusal to engage with the crypto industry (Armstrong claims he has flown to Washington five times trying to meet without success). The new chairman, Tim Scott, made more progress in months than Brown did in years. When it comes to lawmakers like Elizabeth Warren who hold critical views, Armstrong recognizes their perspectives but does not express targeted political actions.

Discussing the relationship with the Trump administration, Armstrong confirmed that President Trump is interested in cryptocurrencies and has openly stated a wish for the U.S. to become the world crypto capital, aligning with Coinbase’s interests. He emphasized that Coinbase takes a bipartisan cooperation approach, making efforts to maintain a working relationship with any ruling party. Regarding the upcoming elections, he said that as a publicly traded company CEO, he will work with any elected officials and will consider donation decisions based on candidates' support for crypto.

Beyond Finance: AI, Human Merging, and Future Vision

The final part of the interview shifted to a broader technological future. When asked about his views on an executive order from the Trump administration regarding voluntary government review of AI models, Armstrong refrained from commenting directly, citing that he had not read the specific text, but he shared general principles about AI regulation: on one hand, the government needs to understand cutting-edge developments and consider export controls for national security reasons; on the other hand, requiring all models to register with the government could stifle innovation, repeating the historical errors of over-regulation leading to industry stagnation (he cited nuclear regulation as an example). The key is balance, ensuring that America maintains its leadership in technology and financial services.

Then the host quoted a "non-traditional" view Armstrong expressed in another podcast: he is open to the idea of "AI surpassing humanity in some way," suggesting that humans should try to merge and evolve with it, while also feeling proud to be the "creators" of AI. Armstrong elaborated on this.

He believes that humanity is going through a process of "acceptance" or "coping," from Deep Blue chess to AlphaGo, and now to self-driving and code generation, AI seems to constantly surpass human capabilities in various fields. He speculates that this surpassing may have no end, and the question is only of time (1 year, 10 years, or 50 years). In face of this, people can feel threatened or reflect on how to make the world better.

Armstrong mentioned that humanity has already merged with AI in many ways. For example, people frequently interact through their smartphones, which learn users' preferences, akin to the brain gradually uploading to the cloud, enhancing efficiency. In the future, this connection will deepen. He envisioned a gradual merging future: first, brain-computer interfaces may allow individuals to query information or send messages directly through thought; subsequently, one might be able to control a humanoid robot body; further down the line, a person might control multiple robot bodies distributed across different locations or even other planets. When a human's biological body ages and dies (although longevity drugs may change this), if "your" consciousness is connected to multiple robot bodies, then losing one body would still feel like "you" are continuous, just like losing an arm does not change the fact that you are you.

Armstrong concluded by stating that through this means, humanity will ultimately merge with AI while maintaining continuity of self in the process. He acknowledges that this involves profound philosophical topics, but he believes it will overall have a very positive impact on society.

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