White House May Drop Crypto Bill After Coinbase Withdrawal: Report

The White House is contemplating withdrawing its help for crypto market construction invoice following an analogous transfer from crypto trade Coinbase, in response to Fox Enterprise reporter Eleanor Terrett, citing a supply near the Trump administration.

In a Sunday post on X, Terrett reported that the White House is livid over Coinbase’s determination to pull its backing for the Digital Asset Market Clarity Act, describing the transfer as a “unilateral” motion that blindsided administration officers.

“The White House is claimed to be livid with Coinbase’s “unilateral” motion on Wednesday, which it apparently was not notified of upfront, calling it a “rug pull” towards the White House and the remainder of the {industry},” she wrote.

The supply added that the administration could totally abandon the invoice until Coinbase returns to negotiations and agrees to a compromise on stablecoin yield provisions that may fulfill banking pursuits. “That is President Trump’s invoice on the finish of the day, not Brian Armstrong’s,” the supply mentioned, in response to Terrett.

Associated: Crypto Industry Splits Over CLARITY Act Market Structure Bill

Coinbase cites dangers to DeFi and stablecoins

On Wednesday, Coinbase CEO Brian Armstrong mentioned the trade couldn’t help the Senate Banking Committee draft in its present type, arguing it could do extra hurt than good. “We’d fairly don’t have any invoice than a nasty invoice. Hopefully we are able to all get to a greater draft,” he mentioned.

Armstrong cited a number of issues, together with what he described as a de facto ban on tokenized equities, broad restrictions on decentralized finance (DeFi) and expanded authorities entry to monetary information that he mentioned might undermine person privateness.

He additionally warned the proposal would weaken the Commodity Futures Buying and selling Fee whereas concentrating extra energy with the Securities and Change Fee, an company broadly criticized by the crypto {industry} for its enforcement-heavy method lately.

One other flashpoint is stablecoins. Armstrong mentioned the draft dangers “killing rewards” on stablecoins, echoing {industry} fears that the invoice is designed to guard banks from competitors. Banking teams have argued that permitting customers to earn roughly 5% yields on stablecoins might set off large-scale deposit outflows from conventional financial savings accounts.

Associated: Banks’ stablecoin concerns are ‘unsubstantiated myths’: Professor

Crypto neighborhood stays divided

Many customers voiced help for Coinbase’s stance, accusing lawmakers and banks of prioritizing incumbents over innovation. “Then the banks ought to cease attempting to screw everybody over,” Nic Carter, cofounder of Coin Metrics, wrote on X.