Coinbase CEO Brian Armstrong has contested reports suggesting the Trump administration threatened to withdraw support for crypto legislation following the exchange's decision to pull its backing this week.
Armstrong stated that the White House had been "super constructive" and had requested Coinbase to negotiate directly with banks regarding stablecoin yield provisions. This statement followed the Senate Banking Committee's postponement of its planned markup session, which occurred just hours after Coinbase withdrew its support on January 14, introducing uncertainty into the bill's timeline.
What Happened
Journalist Eleanor Terrett reported that sources within the White House indicated officials were "furious" over Coinbase's "unilateral" withdrawal and were considering abandoning the CLARITY Act entirely. Armstrong directly challenged this characterization, asserting that administration officials had asked Coinbase to collaborate with banking groups to address concerns about stablecoin yields.
"Actually, we've been cooking up some good ideas on how we can help the community banks specifically in this bill," Armstrong wrote on X.
The core of the dispute lies in provisions that would limit crypto platforms from offering passive yield on stablecoin holdings, a feature that generates approximately $1 billion in annual revenue for Coinbase. Community and regional banks had previously warned that the availability of high-yield stablecoins could accelerate the outflow of deposits from traditional savings accounts, which offer significantly lower interest rates.
Why It Matters
The conflict over stablecoin yields highlights fundamental tensions between the advancement of crypto innovation and the stability of the banking sector, particularly as lawmakers endeavor to establish comprehensive digital asset regulation. Coinbase's withdrawal of support was attributed to several concerns, including restrictions on tokenized equities, prohibitions on decentralized finance, and what Armstrong described as regulatory capture by banking interests.
White House crypto czar David Sacks encouraged the industry to "resolve any remaining differences," emphasizing that "passage of market structure legislation remains as close as it's ever been."
Industry reactions were divided. Ripple CEO Brad Garlinghouse characterized the bill as "a massive step forward," while Kraken's Arjun Sethi cautioned that walking away from it "would lock in uncertainty." The postponement of the markup session effectively pushes major crypto regulatory reform towards late 2026 or 2027, given the pressures of midterm elections and limited legislative opportunities.