Coinbase Disputes White House Hostility Claims, Calls Crypto Bill Talks 'Super Constructive'

Coinbase CEO Brian Armstrong denied reports that the White House is considering pulling support for the CLARITY Act, a proposed crypto market structure bill. He said the administration has been 'super constructive' and is actively working with Coinbase on banking yield issues according to Coinbase.

Armstrong took issue with a recent report by journalist Eleanor Terrett that claimed the White House might withdraw support for the bill unless Coinbase reached a yield agreement with banks. He stated the administration asked Coinbase to explore such a deal and emphasized ongoing efforts to address community bank concerns.

Lawmakers had postponed a scheduled markup of the CLARITY Act after Coinbase withdrew its support, citing concerns over restrictions on DeFi and stablecoin yields. The company said the bill, as drafted, could limit innovation and weaken privacy protections for users.

Why Did Coinbase Withdraw Its Support?

Coinbase cited several concerns with the Senate Banking Committee's draft bill, including what it called a 'de facto ban' on tokenized equities and restrictions on DeFi platforms. The exchange argued that these provisions would reduce the role of the Commodity Futures Trading Commission (CFTC) and give the SEC more authority.

The company also raised concerns about stablecoin yield restrictions, which it said could eliminate a key revenue stream. S&P Global projected that Coinbase's stablecoin-related revenue would reach over $1 billion in 2025.

What Is at Stake for the Bill's Future?

The CLARITY Act aims to provide regulatory clarity for digital assets, including stablecoins, tokenized equities, and DeFi platforms. However, it has faced opposition from crypto firms and banking groups alike. While banks argue that stablecoin yields could siphon deposits from local lending, crypto companies counter that these rewards promote financial innovation and competition according to reports.

The White House reportedly views the bill as a national policy effort, not a single-company initiative. Administration officials expressed frustration over Coinbase's unilateral decision to withdraw support, calling it a 'rug pull'.

What Comes Next for the CLARITY Act?

Senators remain divided over the bill's future, with some expressing optimism that a compromise can be reached. Senator Mark Warner said lawmakers can find a path forward, while others admitted the process may slow down as stakeholders reassess next steps according to analysis.

Coinbase's Armstrong said negotiations continue and that a new markup session could happen in a few weeks. He emphasized the importance of finding a version of the bill that supports innovation while addressing concerns from both the banking and crypto sectors according to CNBC.

White House crypto czar David Sacks has urged the industry to resolve remaining differences, noting that the bill is 'as close as it's ever been' to passage according to The Block. However, with key stakeholders still at odds, the bill's timeline remains uncertain.