The White House is contemplating withdrawing its support for a significant cryptocurrency regulation bill following the unexpected retraction of backing by Coinbase. A source close to the Trump administration indicated that officials were taken by surprise by Coinbase's decision.
The administration is reportedly expressing anger, characterizing Coinbase's move as a "rug pull" that negatively impacted not only the White House but also the broader cryptocurrency industry. Officials claim Coinbase did not provide advance warning before publicly announcing its opposition to the bill.
Consequently, the White House may fully disengage from the Digital Asset Market Clarity Act. However, the administration could reconsider its involvement if Coinbase re-enters negotiations and agrees to a compromise. The primary point of contention revolves around stablecoins, particularly regulations concerning yield-bearing stablecoins. Banks have expressed concerns that allowing stablecoins to offer returns of approximately 5% could divert funds from traditional savings accounts.
The source stressed that this legislation is "President Trump’s bill" and not under the sole control of Coinbase or its CEO, Brian Armstrong.
Coinbase's Opposition to the Crypto Market Structure Bill
Coinbase has stated that it withdrew its support because the bill, in its current iteration, could be detrimental to the cryptocurrency industry. Brian Armstrong asserted that it is preferable to have no legislation than to enact a poorly designed one. He voiced concerns that the proposal might effectively prohibit tokenized stocks, impose stringent restrictions on decentralized finance (DeFi), and grant the government expanded access to users' financial data, thereby compromising privacy.
Armstrong also warned that the bill diminishes the authority of the Commodity Futures Trading Commission (CFTC) while increasing the power of the Securities and Exchange Commission (SEC). The SEC has faced considerable criticism from the crypto industry for its reliance on enforcement actions rather than establishing clear regulatory guidelines.
Reactions within the cryptocurrency community are varied. Some individuals support Coinbase's stance, arguing that lawmakers are prioritizing the protection of banks over fostering innovation. Conversely, others contend that Coinbase, as a single exchange, should not possess the authority to block legislation that has implications for the entire crypto industry.
🚨SCOOP: The White House is considering pulling its support for the crypto market structure bill entirely if @coinbase does not come back to the table with a yield agreement that satisfies the banks and gets everyone to a deal, a source close to the Trump administration tells me.…
— Eleanor Terrett (@EleanorTerrett) January 17, 2026