White House May Pull Support for CLARITY Act After Coinbase
The White House is weighing whether to withdraw backing for a cryptocurrency market-structure bill after Coinbase ended its support for the proposal, Fox Business reporter Eleanor Terrett reported on X, citing a person familiar with the Trump administration’s thinking.
In a Sunday post, Terrett said administration officials were angered by Coinbase’s decision last Wednesday to step away from the Digital Asset Market Clarity Act, characterizing the move as unilateral and made without prior notice. According to the source, the administration could drop the effort entirely unless Coinbase returns to talks and accepts a compromise on stablecoin yield provisions amenable to banking stakeholders.
The source added that the legislation is viewed as an administration initiative rather than one driven by Coinbase CEO Brian Armstrong.
Coinbase cites risks to DeFi and stablecoins
On Wednesday, Armstrong said Coinbase could not endorse the Senate Banking Committee’s draft in its current form, asserting that it would be more harmful than beneficial and expressing a preference for no bill over a flawed one.
Armstrong outlined multiple concerns, including what he described as an effective ban on tokenized equities, broad limitations on decentralized finance (DeFi), and expanded government access to financial records that could compromise user privacy. He also argued the proposal would diminish the Commodity Futures Trading Commission’s role while consolidating greater authority at the Securities and Exchange Commission, which many in the crypto sector have criticized for an enforcement-centric approach in recent years.
Stablecoin provisions are another point of contention. Armstrong warned the draft could eliminate rewards on stablecoins, echoing industry worries that the measure would shield banks from competition. Banking groups have contended that allowing roughly 5% yields on stablecoins could spur significant deposit outflows from traditional savings accounts.
Industry reaction remains mixed
Reaction across the crypto community has been split. Some participants backed Coinbase’s decision, arguing that policymakers and banks are protecting incumbents at the expense of innovation. Others said Coinbase should not wield outsized influence over legislation affecting the broader industry, noting the exchange is only one market participant among many.
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