Tensions are flaring in Washington after a surprise move by Coinbase that has reportedly left the White House fuming.
According to Fox Business reporter Eleanor Terrett, the Trump administration is now weighing whether to walk away from a major crypto market structure bill — a bill it once championed — after Coinbase abruptly withdrew its support.
The legislation in question, the Digital Asset Market Clarity Act, was seen as a cornerstone effort to bring order and legitimacy to the fast-moving crypto sector.
Now, it’s caught in political crossfire.
Inside the White House Backlash
In a Sunday post on X, Terrett said administration officials were blindsided by Coinbase’s decision.
A source close to the White House described the move as a “rug pull,” claiming the exchange acted unilaterally and without warning.
The frustration runs deep. The source suggested that unless Coinbase returns to the table and agrees to changes — particularly around stablecoin yield rules that would ease concerns from banking interests — the White House could completely abandon the bill.
As the source put it bluntly, this legislation is being framed as a presidential priority, not a corporate one.
“This is President Trump’s bill at the end of the day,” the source said, underscoring how personal the issue has become within the administration.
Why Coinbase Walked Away
Coinbase CEO Brian Armstrong publicly explained the company’s decision earlier in the week, saying the Senate Banking Committee’s draft was simply too damaging to support.
In his view, passing a flawed bill would be worse than passing no bill at all.
Armstrong argued that the current language threatens to stifle innovation rather than provide clarity, particularly for emerging areas of the crypto economy.
Among his biggest red flags were provisions he said would effectively block tokenized equities, place sweeping limits on decentralized finance, and expand government access to user financial data — all of which he warned could erode privacy and slow progress.
Regulators, Power Shifts, and Privacy Fears
Armstrong also took aim at the regulatory balance baked into the proposal.
He argued the draft would weaken the Commodity Futures Trading Commission while handing more authority to the Securities and Exchange Commission.
For much of the crypto industry, the SEC has become synonymous with aggressive enforcement rather than constructive oversight.
Concentrating more power there, Armstrong suggested, would only deepen existing tensions between regulators and innovators.
The Stablecoin Standoff
Stablecoins have emerged as one of the most contentious points in the debate.
Coinbase and others fear the bill would effectively eliminate rewards on stablecoins — a move Armstrong said could “kill” one of their key use cases.
Banking groups, however, see things differently.
They’ve warned that stablecoins offering yields of around 5% could lure deposits away from traditional savings accounts, potentially destabilizing parts of the banking system.
Critics in the crypto space argue those fears are exaggerated and designed to shield incumbents from competition.
A Community Split Down the Middle
Reaction across the crypto world has been anything but unified.
Many users rallied behind Coinbase, accusing lawmakers and banks of trying to protect their turf at the expense of innovation.
Some voices were far less diplomatic, arguing that if banks feel threatened, they should compete rather than lobby for restrictions.
Others, though, took a harder line against Coinbase.
They warned that no single exchange should have the power to derail legislation that affects an entire industry.
As one commenter put it, Coinbase may be influential, but it doesn’t speak for all of crypto.
Where the Fight Goes From Here
With the White House now reportedly considering pulling its support, the future of the Digital Asset Market Clarity Act looks uncertain.
Whether this standoff leads to renewed negotiations, a rewritten bill, or a complete collapse of the effort remains to be seen.
What’s clear is that crypto’s push for regulatory clarity is still messy, political, and deeply divided — and the next moves from both Washington and Coinbase could shape the industry’s path well beyond this single bill.
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