Coinbase CEO Brian Armstrong disputed reports that the Trump administration threatened to withdraw support for crypto legislation after the exchange pulled its backing this week.
Armstrong said the White House has been "super constructive" and asked Coinbase to negotiate directly with banks over stablecoin yield provisions.
The Senate Banking Committee postponed its planned markup session just hours after Coinbase withdrew support on January 14, throwing the bill's timeline into uncertainty.
What Happened
Journalist Eleanor Terrett reported that White House sources said officials were "furious" over Coinbase's "unilateral" withdrawal and considering abandoning the CLARITY Act entirely.
Armstrong directly challenged that characterization, stating administration officials requested Coinbase work with banking groups to address concerns about stablecoin yields.
"Actually, we've been cooking up some good ideas on how we can help the community banks specifically in this bill," Armstrong wrote on X.
The dispute centers on provisions that would restrict crypto platforms from offering passive yield on stablecoin holdings, which represent approximately $1 billion in annual revenue for Coinbase.
Community and regional banks warned that allowing high-yield stablecoins could accelerate deposit outflows from traditional savings accounts paying significantly lower rates.
Why It Matters
The stablecoin yield fight exposes fundamental tensions between crypto innovation and banking sector stability as lawmakers attempt comprehensive digital asset regulation.
Coinbase withdrew support citing multiple concerns including restrictions on tokenized equities, decentralized finance prohibitions, and what Armstrong described as regulatory capture by banking interests.
White House crypto czar David Sacks urged the industry to "resolve any remaining differences," noting that "passage of market structure legislation remains as close as it's ever been."
Industry reaction split sharply, with Ripple CEO Brad Garlinghouse calling the bill "a massive step forward" while Kraken's Arjun Sethi warned that walking away "would lock in uncertainty."
The postponement effectively pushes major crypto regulatory reform toward late 2026 or 2027, as lawmakers face midterm election pressures and limited legislative windows.
