Coinbase CEO Denies White House Anger at Unilateral Action, CLARITY Act Focus Still on Yield Protocol

Coinbase has withdrawn its support for the CLARITY Act, claiming the bill would restrict DeFi and eliminate stablecoin rewards. CEO Brian Armstrong stated that the Senate Banking Committee's draft contains provisions that could be worse than having no legislation at all.

The White House is reportedly furious with Coinbase's unilateral decision, which blindsided administration officials and could jeopardize the bill's chances of passing. A source close to the Trump administration said the administration may fully abandon the legislation unless Coinbase returns to negotiations with a stablecoin yield agreement that satisfies banking interests.

Armstrong has framed the dispute as a fight against bank lobbying. He criticized banks for attempting to use regulatory capture to ban competition and argued that all parties should compete on a level playing field. This has put Coinbase at odds with the White House, which views the CLARITY Act as part of President Trump's broader crypto agenda.

Why Did This Happen?

Coinbase cited several concerns with the Senate Banking Committee's draft. These include a de facto ban on tokenized equities, restrictions on DeFi, and expanded government access to financial records. Armstrong also warned that the draft would weaken the Commodity Futures Trading Commission while giving the Securities and Exchange Commission more power.

The White House has urged Coinbase to return to negotiations. David Sacks, the White House's AI and crypto czar, has called for the industry to use the pause in the bill's markup to resolve differences and secure the future of the crypto industry.

How Did Markets React?

The CLARITY Act's future remains uncertain. The Senate Banking Committee postponed its markup session, throwing the bill's immediate prospects into doubt. Ripple and Kraken still support the bill, but Coinbase's withdrawal has created significant uncertainty for lawmakers and investors.

The pause has been described as a normal part of the legislative process and not a political setback. Senator Tim Scott, chair of the Senate Banking Committee, has called for good-faith negotiations among all parties.

What Are Analysts Watching Next?

The White House is considering withdrawing support if Coinbase does not return to the table with a yield agreement that satisfies banking interests. Officials argue that one company cannot represent the entire industry, and the bill reflects presidential priorities rather than corporate interests.

Investor confidence could be lost if lawmakers fail to reach a consensus soon. Fintech platforms are closely watching the restrictions on stablecoin yield for consumers. The result of the CLARITY Act will affect the policy of digital assets, participation in the market, and future stablecoin innovation.

The ability to compromise remains essential to confidence in U.S. crypto regulations. The outcome of the CLARITY Act will determine the regulatory landscape for years to come.