Novogratz blames big banks for stalling a U.S. crypto market bill

In a post on X, Novogratz said the market structure bill in Washington could collapse because lawmakers and lobbyists can’t agree on whether stablecoin holders should be allowed to earn yield.

He didn’t sugarcoat the fight. Banks, Novogratz argues, don’t want crypto platforms paying customers for holding stablecoins because it turns stablecoins into a direct competitor to bank deposits. From the banks’ perspective, that’s a recipe for liquidity walking out the door. The result, he says, is politics overpowering common sense: instead of writing clear rules for crypto, everyone is arguing over who gets to share interest with retail customers.

If the bill fails, Novogratz says the blame should be spelled out plainly: banks, and senators from both parties who back their position. The biggest losers, in his view, would be U.S. consumers. Without legislation, the market stays in the same gray area, and the fight for users’ dollars only gets more aggressive.

Coinbase is trying to tackle the issue head-on. CEO Brian Armstrong said he plans to keep talking in Davos and meet with bank leaders to find a compromise on the sticking points. One recent draft of the bill includes a ban on “passive” yield for simply holding a stablecoin. It would allow only “active” rewards tied to transactions, staking, or providing liquidity. After Coinbase publicly criticized that approach, the Senate committee overseeing the process postponed its markup with no new date.

Novogratz sees the stakes as bigger than one clause. Last fall, he argued that clear U.S. rules, including guardrails for stablecoins (the GENIUS Act) and a bill that draws a line between regulators (the CLARITY Act), could disrupt the usual four-year Bitcoin cycle by pulling in a new wave of users and fintech companies. Now his tone is sharper. He points to rising gold prices as a signal the dollar is losing ground as the world’s go-to reserve currency, and he calls the selloff in long-dated bonds a worrying sign for long-term investors.

At the same time, Novogratz says Bitcoin has been underwhelming lately because sellers keep leaning on the market. For confidence to return, he believes BTC needs to hold above $100,000–$103,000.