Coinbase Refutes Rumors of White House Threat to Pull Support for Crypto Bill

The U.S. crypto market structure bill, the Digital Asset Market Clarity Act, faces a major setback after Coinbase unexpectedly withdrew its support. The move has reportedly prompted the White House to consider abandoning the bill altogether if Coinbase refuses to return to negotiations and agree on stablecoin yield provisions.

Coinbase CEO Brian Armstrong stated the draft bill would harm innovation, impose unnecessary restrictions on DeFi, and eliminate stablecoin rewards. "We'd rather have no bill than a bad bill," he said, citing several concerns including a de facto ban on tokenized equities and expanded government access to financial records.

The White House described Coinbase's decision as a "rug pull" that blindsided administration officials. A source close to the Trump administration told Fox Business reporter Eleanor Terrett that the bill is a national priority, not a corporate one, and the administration is prepared to walk away if Coinbase does not return to the table.

Why Did This Happen?

Coinbase's move was driven by concerns over how the bill could impact key parts of the crypto ecosystem. Armstrong cited a de facto ban on tokenized equities as a major issue, arguing that the legislation would hinder innovation in real-world asset tokenization.

Another key point of contention is stablecoin yield. The bill has been criticized for limiting rewards on stablecoins, a core feature for platforms like Coinbase. Banking interests have lobbied for these restrictions, citing unfair competition with traditional savings accounts.

The White House, however, sees the bill as a critical part of the administration's broader economic strategy. A government source emphasized that the legislation is not about protecting a single company but ensuring a level playing field for the entire industry.

How Did Markets React?

Coinbase's decision has caused uncertainty in the market. The Senate Banking Committee has postponed its markup of the bill, and the delay has raised concerns among investors and lawmakers about the bill's future.

Coinbase's stock fell on the news, as did the broader crypto market. Bitcoin dropped to below $96,000 in response to the regulatory uncertainty. However, some industry observers remain optimistic that a compromise can be reached. Senator Mark Warner said lawmakers are still working in good faith to move the bill forward.

What Are Analysts Watching Next?

Industry players are closely monitoring how negotiations proceed. While Ripple and Kraken continue to support the CLARITY Act, Coinbase's withdrawal highlights the deepening divide in the crypto industry.

Analysts are watching for signs of compromise on stablecoin yield and DeFi regulation. The ability to resolve these issues will determine whether the bill can pass and provide much-needed clarity for the industry.

The Senate Banking Committee has not set a new date for the markup, but lawmakers remain optimistic about finding a solution. If the bill fails to pass, it could delay federal crypto regulations by months, raising concerns about U.S. competitiveness in the global market.

In the coming weeks, the focus will be on whether Coinbase and the administration can agree on key provisions. The outcome will shape the future of crypto regulation and determine whether the U.S. can maintain its leadership in the digital asset space.