Coinbase CEO Brian Armstrong has denied reports claiming that the White House has withdrawn support for the CLARITY Act. He confirmed that talks between the administration and Coinbase remain productive and ongoing. Armstrong emphasized that the discussions continue with an aim to reach a balanced approach for crypto regulation.
Concerns Over CLARITY Act’s Impact on Crypto Innovation
Coinbase recently withdrew its support for the CLARITY Act over concerns about the bill’s impact on the crypto market. The company expressed worry that the legislation could limit decentralized finance (DeFi) activities, restrict tokenized equity, and prohibit stablecoin issuers from offering yield-like products. These provisions, according to Coinbase, would hinder growth in the crypto sector.
While the CLARITY Act aims to define regulatory boundaries for digital assets, it has generated significant opposition from various industry players. Armstrong pointed out that the bill’s proposed changes would shift oversight from the Commodity Futures Trading Commission (CFTC) to the Securities and Exchange Commission (SEC). The industry remains divided on whether a revised version of the bill would provide much-needed regulatory clarity or impose damaging restrictions.
Ongoing Talks and Stability Concerns Over Stablecoin Yields
Armstrong addressed concerns that Coinbase’s withdrawal from backing the CLARITY Act had strained relations with the White House. He stressed that the administration is still engaged in talks and is focused on balancing crypto innovation with the traditional financial sector’s needs. Key discussions have centered on how the bill would affect smaller banks, particularly regarding stablecoin yields and their impact on deposit flow.
Banks have voiced concerns that crypto-issued yields could draw deposits away from traditional financial institutions. This issue has emerged as a primary sticking point in negotiations between lawmakers and policymakers. Armstrong explained that these talks aim to explore compromises, particularly with regional lenders who are central to the debate over stablecoin regulation.
Despite tensions, Armstrong reassured that discussions with the White House remain “constructive.” Negotiations continue as lawmakers prepare to revise the language of the bill in early 2026. Armstrong’s comments aim to clarify the ongoing collaboration and the potential for finding common ground on the future of crypto regulation in the U.S.