The White House is threatening to withdraw its backing for the Senate Committee’s crypto market structure bill, which was intended to go to a vote last Thursday. Now, they are advocating for Coinbase to re-engage with lawmakers after the exchange’s CEO stated that the company “can’t support the way the law is written.”
According to a source close to the administration, the White House is prepared to abandon the legislation if Coinbase does not return to negotiations and agree to a yield framework that satisfies banking interests and brings all parties back to a consensus. On Wednesday and Thursday, senior administration officials, lawmakers, and industry figures were poised to vote on the nearly 300-page Clarity Act. Coinbase’s declaration that it would not be among its supporters forced the committee to postpone the vote and hold further discussions, a development that caused significant disappointment at the Oval Office.
White House Expresses Frustration Over Coinbase's Surprise Withdrawal
Speaking to Crypto In America journalist Eleanor Terrett, the source revealed that Coinbase made a “unilateral” move that caught the White House and other stakeholders by surprise. The White House has privately characterized Coinbase’s action as a “rug pull” against the administration and the broader crypto industry, according to the source. Washington has criticized the crypto exchange for attempting to “dictate the fate of industry-wide legislation,” emphasizing that the bill was the product of negotiations among a coalition of lawmakers, regulators, and market participants.
“This is President Trump’s bill at the end of the day, not Brian Armstrong’s,” the source stated.
President Trump has consistently shown strong support for digital asset innovation since assuming his position in the US, and his administration had backed the House version of the Clarity Act earlier this year. However, the President's camp is now willing to let the bill fail rather than yield to “pressure from a single company.”
Coinbase chief executive Brian Armstrong defended his company’s decision in a CNBC interview on Thursday, asserting that the firm had identified provisions that would be detrimental to consumers.
“The high-level principle is that you can’t really have banks come in and try to kill their competition at the expense of the American consumer,” he told the news outlet.
Armstrong had initially announced Coinbase’s opposition in a post on X late Wednesday, writing: “Coinbase unfortunately can’t support the bill as written. This version would be materially worse than the current status quo. We’d rather have no bill than a bad bill.”
As Cryptopolitan reported on Friday, he further explained that traditional savings accounts typically yield about 14 basis points on average, while stablecoin rewards can reach 3.8%, presenting an opportunity for banks to innovate without risking their business models.
Months of Discussions Halted by a Single Company's Stance
Congressional staff had reportedly collaborated with industry representatives for months to draft the Clarity Act, which aims to establish regulatory boundaries for trading, custody, issuance, and decentralized finance. Coinbase, now publicly traded on Nasdaq with a market value approaching $70 billion, has been instrumental in financing a network of political action committees that collectively spent over $130 million during the 2024 election cycle to support crypto-friendly candidates. Some observers believe this financial backing may have contributed to the company’s significant influence on crypto-related legislation.
“Coinbase alone does not speak for the crypto industry and should not have a stranglehold on legislation. I also do not believe that the yield on stablecoins should be the deciding factor. This bill, at its core, has nothing to do with yield on stablecoins,” commented one proponent of the market structure bill on X.
When questioned about whether discussions had resumed following the unexpected withdrawal, Kara Calvert, Coinbase’s head of US policy, described the pause as a “shock to the system.”
“We want to be respectful of the fact that blood, sweat, and tears have gone into this bill. I can’t stress enough how impressive it has been for the Senate staff and the Senators themselves who met for hundreds of hours at the member level to discuss these details…We want to make sure we are at the table working through these details, that we are going to get this done, and I don’t think anyone is walking away, Democrat, Republican, and I think even the industry is still absolutely united,” she stated in an interview with Crypto In America.