Coinbase withdrew its backing of a major crypto market structure bill this week, forcing the Senate Banking Committee to delay a planned vote. This development occurred ahead of a scheduled committee vote last Thursday. Senior White House officials, Coinbase executives, and lawmakers became involved after the exchange objected to specific yield provisions within the bill. The exchange's objection ultimately delayed the vote and cast uncertainty on the bill's future.
Coinbase's withdrawal of support for the CLARITY Act was reportedly due to concerns over stablecoin yield limits. This move has placed the bill's progression in jeopardy.
The White House stated that it was blindsided by Coinbase's decision, characterizing the action as a "rug pull." Officials are now weighing whether to withdraw their support for the bill entirely.
Coinbase CEO Brian Armstrong has argued that the bill's provisions protecting banks could cap stablecoin yields, potentially harming consumers and stifling competition.
White House Reaction and Legislative Fallout
According to a source close to the Trump administration, the White House is considering withdrawing its support for the Clarity Act. This source indicated that White House officials felt blindsided by Coinbase's decision, as it occurred without prior notice.
The administration described Coinbase's move as a "rug pull" directed at lawmakers and industry participants. The nearly 300-page bill had been scheduled for a committee vote following months of negotiations.
However, Coinbase's public withdrawal of support compelled senators to postpone the markup session. The White House emphasized that the legislation represents a broad coalition effort, not the position of a single company. The source stated, "This is President Trump’s bill," referencing Brian Armstrong.
Coinbase's Position and Public Response
Coinbase CEO Brian Armstrong defended the decision during a CNBC interview. He argued that certain provisions within the bill could negatively impact consumers and limit competition in the market. Armstrong contended that banks should not be allowed to suppress stablecoin yields as a means of protecting traditional savings products. He later reiterated his stance in a post on X, expressing opposition to the bill's current language.
Armstrong highlighted that average savings accounts currently yield approximately 14 basis points, while stablecoin rewards can reach up to 3.8%. He asserted that banks possess the capacity to innovate without facing material risk. Coinbase's current position represents a notable shift, given its prior involvement in the bill's drafting process.
Industry Talks and Political Pressure
Congressional staff reportedly collaborated with industry representatives for several months to draft the Clarity Act. The bill's objectives include clarifying regulations concerning trading, custody, issuance, and decentralized finance within the cryptocurrency market.
Coinbase, a company valued at nearly $70 billion, had also supported crypto-friendly candidates during the 2024 elections. This suggests a prior alignment with broader industry political objectives.
Speaking to Eleanor Terrett of Crypto In America, a source indicated that the White House might withdraw its support rather than yield to pressure from a single company. Concurrently, Coinbase's head of U.S. policy, Kara Calvert, described the pause in the legislative process as a "shock to the system." She affirmed that discussions are ongoing and characterized the current talks as respectful and active.