The White House is weighing whether to withdraw its support for a crypto market structure bill after crypto exchange Coinbase took a similar step, according to Fox Business reporter Eleanor Terrett, citing a source close to the Trump administration.
In a post on X on Sunday, Terrett said the administration is angered by Coinbase’s decision to pull its backing for the Digital Asset Market Clarity Act, describing the move as a unilateral decision that caught White House officials off guard.
“The White House is reportedly furious over Coinbase’s ‘unilateral’ action on Wednesday, which it says it was not informed about in advance, calling it a ‘rug pull’ on the administration and the broader industry,” Terrett wrote.
According to the source, the administration could abandon the legislation altogether unless Coinbase reengages in talks and agrees to a compromise on stablecoin yield provisions that aligns with banking sector interests. “This is President Trump’s bill at the end of the day, not Brian Armstrong’s,” the source said, as quoted by Terrett.
Coinbase flags risks to DeFi and stablecoins
On Wednesday, Coinbase CEO Brian Armstrong said the exchange could not back the Senate Banking Committee’s draft in its current form, arguing the proposal would cause more harm than good. “We’d rather have no bill than a bad bill. Hopefully we can all get to a better draft,” Armstrong said.
He pointed to several concerns, including what he described as an effective ban on tokenized equities, sweeping constraints on decentralized finance (DeFi), and expanded government access to financial data that could erode user privacy.
Armstrong also warned that the draft would weaken the Commodity Futures Trading Commission while shifting greater authority to the Securities and Exchange Commission, an agency the crypto industry has criticized in recent years for relying heavily on enforcement actions.
Stablecoins emerged as another major point of contention. Armstrong said the proposal risks “killing rewards” on stablecoins, reinforcing industry concerns that the bill is structured to shield banks from competition. Banking groups have argued that allowing stablecoins to offer yields of around 5% could lead to significant deposit outflows from traditional savings accounts.
Crypto community split on Coinbase’s move
Reaction within the crypto community has been mixed. Many users backed Coinbase’s position, accusing lawmakers and banks of favoring incumbents over innovation. “Then the banks should stop trying to screw everyone over,” Coin Metrics cofounder Nic Carter wrote on X.
Others countered that Coinbase overreached and should not wield outsized influence over legislation affecting the entire industry. “Coinbase is not crypto. Coinbase is one exchange in crypto,” one user commented.
