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The White House is reportedly weighing a dramatic withdrawal of support for a major cryptocurrency market-structure bill after Coinbase Global Inc., the largest U.S. digital asset exchange, publicly pulled its backing ahead of a crucial Senate Banking Committee vote.
The move has thrown the future of the Digital Asset Market Clarity Act, known informally in policy circles as the Clarity Act, into doubt as lawmakers, regulators, and the crypto industry confront deep divisions over fundamental regulatory priorities.
Originally positioned as a bipartisan effort to bring long-awaited legal clarity to digital assets by defining when tokens fall under securities versus commodities rules and clearly assigning oversight roles to federal regulators, the bill’s markup was postponed after Coinbase’s withdrawal.
A source close to the Trump administration told reporters that officials may retract White House backing unless Coinbase returns to the table with a yield-related compromise that satisfies both the banking sector and broad industry interests, underscoring the fragile coalition behind the legislation.
According to sources, this is President Trump’s bill, not Brian Armstrong’s bill, and the administration’s frustration is that a single corporate actor could upend months of negotiations.
Coinbase CEO Brian Armstrong took to social media to explain the company’s decision, characterising the draft bill’s provisions as potentially more harmful to the industry than the current regulatory vacuum.
“After reviewing the Senate Banking draft text … Coinbase unfortunately can’t support the bill as written,” Armstrong wrote on X.
He cited and described the whole scenario as a de facto ban on tokenized equities, privacy concerns tied to decentralized finance (DeFi) provisions, and restrictions on stablecoin incentives.
Armstrong has long positioned Coinbase as a pro-regulation but pro-innovation actor in Washington, having backed earlier versions of market-structure proposals. But he argued that certain elements of the latest draft would weaken the Commodity Futures Trading Commission’s authority.
By doing the above while expanding the Securities and Exchange Commission’s reach, they stifle innovation and eliminate a competitive edge that stablecoin yield programmes give emerging digital asset platforms.
“We’d rather have no bill than a bad bill,” – Armstrong noted
He continued by reflecting a hardening stance that the company’s leadership believes protects both its business model and broader industry interests.
The immediate political consequence was the Senate Banking Committee’s decision to delay its scheduled markup of the bill. Committee Chairman Sen. Tim Scott (R-S.C.) said the postponement was a temporary pause to allow more time for discussions among lawmakers, regulators, and stakeholders.
White House AI and crypto adviser David Sacks responded on X by urging continued collaboration:
“Now is the time to set the rules of the road,” he wrote, calling for unity in crafting workable legislation that balances innovation with financial stability and consumer protection.
Industry voices have been split. Some executives and advocacy groups caution that without regulatory clarity, the U.S. risks losing leadership in digital assets, while others back Coinbase’s critique that poorly drafted rules could entrench incumbents and harm competition.
Analysts note that Coinbase’s abrupt reversal is coming just days before the markup and has reverberated beyond policy circles.
Major crypto-related stocks, including Coinbase itself, Circle, and Robinhood, experienced notable price declines in the wake of the announcement, erasing billions in market value.
This standoff illustrates the high-stakes political negotiation shaping the regulatory environment for digital assets.
The Clarity Act is seen by many as a cornerstone of U.S. efforts to harmonize oversight in a rapidly evolving sector, drawing on years of industry lobbying, bipartisan congressional support, and intense negotiations between competing interests.
At its core, the dispute highlights contrasting visions for how cryptocurrency should be regulated: whether to prioritize consumer protections and risk mitigation concerns, often cited by banks and traditional financial regulators or to preserve innovation and competitive parity alongside established financial players.
The debate over stablecoin yield programs, for example, pits concerns about bank deposits and financial stability against the desire to foster novel financial products. Lawmakers now face pressure to reconcile these positions if they hope to salvage the legislative effort.
As one industry advocate put it, the next few weeks could be decisive: a successful compromise might reinvigorate legislative momentum, while a breakdown could leave policymakers scrambling to chart a new path for digital asset oversight in this pivotal moment for the sector.
