The White House has warned it may withdraw support for a major crypto market structure bill after a sudden clash with Coinbase, according to a report from journalist Eleanor Terrett. The dispute has raised fresh doubts about whether Washington can reach a compromise between crypto firms, banks, and lawmakers.
White House Signals It Could Walk Away
A source close to the Trump administration said the White House could drop its backing for the bill if Coinbase refuses to agree on yield rules. The source said the administration wants an outcome that satisfies banks and keeps negotiations moving.
Besides, officials reportedly felt blindsided by Coinbase’s actions this week. They viewed the move as a setback for the wider push to pass the bill.
The source also suggested the White House sees the bill as a national policy effort, not a single-company campaign. Consequently, the administration does not want any firm to shape the process alone. The anger reportedly stems from what officials described as an unexpected and independent shift by Coinbase.
Coinbase Pushes Back on the Draft
On Wednesday, Coinbase CEO Brian Armstrong said the company cannot support the Senate Banking Committee draft as it stands. He argued the proposal could damage innovation across key crypto sectors. Additionally, he warned that parts of the bill could restrict tokenized equities and tighten rules around decentralized finance.
Armstrong also raised concerns about broader government access to financial records. He said the draft could weaken privacy protections for users. Moreover, he criticized the balance of power between regulators. He argued the bill could reduce the CFTC’s role while giving more influence to the SEC.
Stablecoins have also become a central point of tension. Armstrong said the bill could limit yield-style rewards on stablecoins. Hence, he suggested lawmakers may aim to shield banks from stronger competition. Banking groups have warned that stablecoin yields could pull deposits away from traditional savings products.
Lawmakers Look for a Path Forward
The wider crypto community has split over Coinbase’s approach. Some users supported its stance and blamed banks for blocking change. However, others worry that the conflict could stall progress at a critical moment.
Several senators have said they still want to move the bill forward. Senator Mark Warner said lawmakers can find a way to keep talks alive. Still, the timing remains unclear, and some observers expect delays into February.
Senator Cynthia Lummis also signaled the process may slow down as stakeholders reassess next steps. Meanwhile, Galaxy Digital CEO Mike Novogratz predicted the CLARITY Act could pass within two weeks after recent Senate meetings.
Source: https://coinpaper.com/13826/white-house-warns-it-may-drop-crypto-bill-support-after-coinbase-rift
