Coinbase withdrew support for the CLARITY Act, warning the draft would restrict DeFi, ban tokenized equities and eliminate stablecoin rewards.
The White House is considering withdrawing its support for crypto market structure bill following a similar move from crypto exchange Coinbase, according to Fox Business reporter Eleanor Terrett, citing a source close to the Trump administration.
In a Sunday post on X, Terrett reported that the White House is furious over Coinbase’s decision to pull its backing for the Digital Asset Market Clarity Act, describing the move as a “unilateral” action that blindsided administration officials.
“The White House is said to be furious with Coinbase’s “unilateral” action on Wednesday, which it apparently was not notified of in advance, calling it a “rug pull” against the White House and the rest of the industry,” she wrote.
The source added that the administration may fully abandon the bill unless Coinbase returns to negotiations and agrees to a compromise on stablecoin yield provisions that would satisfy banking interests. “This is President Trump’s bill at the end of the day, not Brian Armstrong’s,” the source said, according to Terrett.
Related: Crypto Industry Splits Over CLARITY Act Market Structure Bill
On Wednesday, Coinbase CEO Brian Armstrong said the exchange could not support the Senate Banking Committee draft in its current form, arguing it would do more harm than good. “We’d rather have no bill than a bad bill. Hopefully we can all get to a better draft,” he said.
Armstrong cited several concerns, including what he described as a de facto ban on tokenized equities, broad restrictions on decentralized finance (DeFi) and expanded government access to financial records that he said could undermine user privacy.
He also warned the proposal would weaken the Commodity Futures Trading Commission while concentrating more power with the Securities and Exchange Commission, an agency widely criticized by the crypto industry for its enforcement-heavy approach in recent years.
Another flashpoint is stablecoins. Armstrong said the draft risks “killing rewards” on stablecoins, echoing industry fears that the bill is designed to protect banks from competition. Banking groups have argued that allowing users to earn roughly 5% yields on stablecoins could trigger large-scale deposit outflows from traditional savings accounts.
Related: Banks’ stablecoin concerns are ‘unsubstantiated myths’: Professor
Many users voiced support for Coinbase’s stance, accusing lawmakers and banks of prioritizing incumbents over innovation. “Then the banks should stop trying to screw everyone over,” Nic Carter, cofounder of Coin Metrics, wrote on X.
Others argued that Coinbase overplayed its hand and should not hold veto power over legislation with industry-wide implications. “Coinbase is not crypto. Coinbase is one exchange in crypto,” one user wrote.
