By: Swarnalata
Published on: May 15, 2025
Coinbase Global (COIN), the largest cryptocurrency exchange in the United States, is making headlines as it prepares to join the S&P 500 (^GSPC) on May 19, 2025. This milestone, coupled with a robust earnings report and a $2.9 billion acquisition of crypto derivatives platform Deribit, has propelled Coinbase’s stock price upward by over $50 in recent trading sessions. In an exclusive interview with Yahoo Finance senior reporter Jennifer Schonberger on Capitol Hill, Coinbase CEO Brian Armstrong shared insights on the company’s inclusion in the S&P 500, the push for stablecoin legislation, and the integration of banking and fintech services into the crypto ecosystem under the Trump administration. This blog post explores these developments, their implications for Coinbase, and the broader cryptocurrency market.
Coinbase’s addition to the S&P 500, replacing Discover Financial Services, marks a significant moment for the cryptocurrency industry. The S&P 500 is a prestigious index comprising 500 of the largest publicly traded companies in the U.S., and Coinbase’s inclusion signals mainstream acceptance of crypto as an asset class. Armstrong emphasized this point, stating, “Coinbase joining the S&P 500 means crypto’s here to stay. It’s going to be in everybody’s 401(k). Everyone’s going to have crypto exposure at least indirectly through Coinbase.”
This move is expected to boost Coinbase’s visibility and attract institutional investors, as many funds and retirement accounts track the S&P 500. Posts on X reflect this sentiment, with users like @CryptosR_Us noting, “It now means that crypto is here to stay; It’s going to be a part of everybody’s 401(k).” The stock’s recent surge, fueled by the S&P announcement and strong earnings, underscores investor confidence in Coinbase’s growth trajectory.
A key focus of Armstrong’s Capitol Hill discussion was stablecoin legislation, particularly the Senate’s GENIUS Act and the House’s STABLE Act. Stablecoins, cryptocurrencies pegged to assets like the U.S. dollar, are critical to the crypto ecosystem, facilitating fast and low-cost transactions. Armstrong expressed optimism about the Senate passing the GENIUS Act, stating, “I’m actually pretty optimistic this bill can get done. There’s a lot of urgency on both sides of the aisle to see this come to fruition.”
However, Armstrong has voiced concerns about provisions in both bills that prohibit stablecoin issuers from paying interest to holders, arguing that this restriction limits consumer benefits and stifles innovation. In a March 31, 2025, post on X, he wrote, “Stablecoins should be able to pay interest just like an ordinary savings account, without the onerous disclosure requirements and tax implications imposed by securities laws.” He estimates that enabling on-chain interest could yield consumers around 4% annually, significantly higher than the 0.41% average savings account rate in 2024.
Armstrong’s push for interest-bearing stablecoins has sparked debate. Critics, including Senator Kirsten Gillibrand (D-NY), argue that allowing stablecoin interest payments could disrupt traditional banking by reducing deposits needed for loans and mortgages. Armstrong counters that both banks and crypto firms should be allowed to offer interest, promoting a free-market approach. He believes this would drive competition, benefit consumers, and strengthen the U.S. economy by increasing spending, saving, and investment.
The Trump administration’s crypto-friendly stance, coupled with President Trump’s own involvement in a stablecoin venture (USD1 via World Liberty Financial), has added complexity to the legislative landscape. Some Democrats, like Senator Elizabeth Warren, have criticized the legislation, alleging it benefits Trump financially. Despite these challenges, Armstrong remains confident, citing bipartisan support and the industry’s growing influence in Washington.
Armstrong envisions a future where crypto, particularly stablecoins, becomes integral to the global financial system. He advocates for banks, fintech companies, and payment providers to adopt stablecoin technology, stating, “Crypto is a technology to update the financial system, and we want every bank, fintech company, every payment company to be integrated.” He predicts that stablecoin rails could eventually handle the majority of economic payments, offering faster and cheaper transactions compared to traditional systems.
Interestingly, Armstrong clarified that Coinbase has no immediate plans to pursue a banking license, as current regulations do not require it. However, he remains open to future changes in the law. This stance reflects Coinbase’s strategy to focus on crypto-native solutions, such as tokenized equities and stablecoin-based payments, rather than competing directly with traditional financial institutions.
Coinbase’s acquisition of Deribit, a leading crypto derivatives platform, aligns with this vision. The $2.9 billion deal enhances Coinbase’s offerings for sophisticated traders, positioning it to capture a growing segment of the market. Armstrong also highlighted the potential for tokenized assets, noting discussions with the SEC’s crypto task force about bringing traditional securities on-chain for 24/7 trading. This could democratize access to capital markets, allowing global participation and streamlining processes like capital formation.
The Trump administration’s pro-crypto stance has energized the industry, with Armstrong describing it as “the dawn of a new day for crypto.” President Trump has signaled support for clear regulations, and the appointment of Paul Atkins as SEC Chair is seen as a positive development for crypto advocates. Armstrong believes the incoming Congress, potentially the “most pro-crypto Congress ever,” could deliver regulatory clarity, particularly for stablecoins and market structure.
Coinbase has actively engaged with regulators, leveraging its position as a regulated U.S. exchange to advocate for industry-friendly policies. Armstrong’s presence at the World Economic Forum in Davos and his meetings in Washington underscore the company’s influence. He noted that Trump’s crypto plans dominated discussions among financial leaders, with many seeking to avoid being “left behind.”
However, regulatory hurdles remain. The GENIUS and STABLE Acts propose treating stablecoin issuers as financial institutions under the Bank Secrecy Act, raising concerns about compliance costs and global competitiveness. Armstrong has also called for stablecoin issuers to back their tokens fully with U.S. Treasury bills, a move that could enhance stability but challenge offshore firms like Tether. Coinbase’s decision to delist non-compliant stablecoins in Europe under MiCA regulations demonstrates its commitment to regulatory adherence.
Coinbase’s inclusion in the S&P 500 and its recent acquisitions position it as a leader in the crypto industry. The company’s platform supports a wide range of activities, including trading, staking, and custody, and its partnership with Circle (issuer of USDC) generates significant revenue. Armstrong sees Coinbase as a key player in powering crypto services for Fortune 500 companies, comparing crypto’s adoption to the internet’s mainstream integration.
The stablecoin market, valued at $234.46 billion as of May 2025, continues to grow, with a 4.52% increase in the past 30 days. Armstrong believes stablecoins could become one of the largest holders of U.S. Treasuries, reinforcing the dollar’s global dominance. By advocating for interest-bearing stablecoins and tokenized assets, Coinbase aims to drive adoption and unlock new revenue streams.
Despite its progress, Coinbase faces challenges. Critics argue that interest-bearing stablecoins could be classified as securities, subjecting issuers to stringent SEC regulations. Circle’s recent IPO filing echoed this concern, noting that classifying USDC as a security could disrupt its operations. Additionally, the political entanglement of stablecoin legislation with Trump’s ventures has raised concerns about conflicts of interest.
Armstrong’s vision of a crypto-driven financial system also faces skepticism from traditional banking advocates, who fear disruption to their business models. Balancing innovation with regulatory compliance and consumer protection will be critical for Coinbase and the broader industry.
Coinbase’s inclusion in the S&P 500, its push for stablecoin legislation, and its integration of banking and fintech services mark a pivotal moment for the cryptocurrency industry. Under Brian Armstrong’s leadership, Coinbase is positioning itself as a bridge between traditional finance and the crypto economy. The company’s advocacy for interest-bearing stablecoins, tokenized assets, and clear regulations reflects its ambition to reshape global finance. As the Trump administration signals support for crypto, Coinbase is well-placed to capitalize on this momentum, but navigating regulatory and political complexities will be key to its success.
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