Recent reports suggested a strained relationship between Coinbase and the Trump administration, with speculation that the White House might reconsider its support for the CLARITY Act—a bill aimed at establishing clearer rules for the U.S. crypto market. However, Brian Armstrong, CEO of Coinbase, has rejected these claims, emphasizing that the administration’s engagement with the exchange has remained constructive and collaborative.
Armstrong took to X (formerly Twitter) to address the circulating claims, noting that reports of tension were inaccurate. He explained that the White House had asked Coinbase to explore potential arrangements with banks, a process the company is actively pursuing. Armstrong also highlighted that Coinbase is developing initiatives specifically designed to assist community banks in navigating the provisions of the CLARITY Act.
These remarks came in response to journalist Eleanor Terrett, who had reported that the administration was frustrated with Coinbase and might withdraw backing for the bill if discussions with the exchange did not continue. Armstrong clarified that, contrary to those reports, dialogue remains productive, with both parties working toward practical solutions for the market.
Concerns Delay CLARITY Act Progress
Coinbase formally withdrew its backing of the CLARITY Act on Wednesday, citing multiple issues, including concerns that:
- •Tokenized equities could effectively be prohibited, limiting options for new financial products.
- •DeFi activities might be restricted, while government access to financial records could compromise user privacy.
- •The CFTC’s authority could be reduced, leaving it less independent and more subordinate to the SEC.
- •Draft amendments could eliminate stablecoin rewards, giving traditional banks a competitive edge.
Following this, the U.S. Senate Banking Committee delayed the scheduled review of the CLARITY Act to give lawmakers and industry representatives more time to address outstanding concerns.
Industry Divisions Over the CLARITY Act and Stablecoin Rules
Consequently, the CLARITY Act has sparked differing opinions among industry executives. Some see the bill as largely positive despite certain limitations, while others consider it a significant challenge for innovation. Chris Dixon, managing partner at a16z Crypto, noted that while the legislation is not flawless and requires amendments, moving it forward is important to ensure the U.S. maintains its leadership in crypto development.
On the other hand, Ryan Rasmussen, head of research at Bitwise Invest, criticized the current draft of the CLARITY Act, pointing out its adverse effects on tokenization, stablecoins, DeFi, privacy, developers, users, investors, and overall innovation. He argued that passing a flawed bill would be worse than having no legislation at all.
A central issue continues to be how stablecoin yields are handled, as the current draft of the bill seeks to prevent customers from receiving these rewards. This provision has become central to the industry’s divided stance, highlighting the challenge of balancing regulation with the promotion of innovation in the U.S. crypto market.