Coinbase has announced its withdrawal of support for the Clarity Act, sparking anger from the White House. The ecosystem needs a clear vision, but as Brian Armstrong argues, “we prefer no law to a bad law.” The central question remains: who will prevail in this tug-of-war over the future of stablecoin yields—traditional finance or the cryptocurrency ecosystem?
Review postponed: discussions needed for adoption of Clarity Act continue
The Senate committee responsible for the bill, known as the Clarity Act, has decided to postpone its review. Committee Chairman Senator Tom Scott explained that this decision was made in order to continue discussions and gather the broad support needed for the legislation to be passed.
I’ve spoken with leaders across the crypto industry, the financial sector, and my Democratic and Republican colleagues, and everyone remains at the table working in good faith.
As we take a brief pause before moving to a markup, this market structure bill reflects months of…
— Senator Tim Scott (@SenatorTimScott) January 15, 2026
This bill is the result of an intense lobbying campaign conducted over several years by the cryptocurrency industry, with Coinbase at the forefront. On the other side of the fence, “the banking lobby is very good at persuading members of Congress to protect its interests,” said Faryar Shirzad, CPO of Coinbase, in an interview with CNBC.
This is indeed a structuring regulation for the industry, insofar as it aims to formalize clear rules governing all activities in the cryptocurrency ecosystem, including those falling under the SEC’s jurisdiction.
The bill of President Donald Trump or Coinbase CEO Brian Armstrong?
The text of this highly anticipated bill was unveiled on Monday, January 12. Just 48 hours later, Coinbase announced that it was withdrawing its support for the bill. Its CEO, Brian Armstrong, explained that after “reviewing the Senate’s banking bill […], Coinbase unfortunately cannot support the bill as written.”
In his public statement, he denounced in particular “the erosion of the CFTC’s authority, which would stifle innovation by placing it under the supervision of the SEC.” As it stands, the bill would lead to a ban on DeFi, posing a major threat to Americans’ privacy, according to Brian Armstrong.
Furthermore, according to the CEO of Coinbase, the removal of rewards associated with stablecoins would be a maneuver by banks to stifle competition. In this particularly confusing context, freelance journalist Eleanor Terrett published revelations on Friday that shook the Twitter community.
She describes a White House furious at Coinbase’s unilateral decision on Wednesday, a decision of which it had not been informed in advance. The White House is reportedly considering withdrawing its support for the bill if Coinbase does not return to the negotiating table. Eleanor Terrett concludes by quoting a source close to the Trump administration: “At the end of the day, this is President Trump’s bill, not Brian Armstrong’s.”
My reporting was airtight and accurate.
You also just cited the central point of my story as correct: that the White House asked Coinbase to go secure a deal on yield. My reporting is that WH support now appears to be contingent on that outcome. https://t.co/rLn839kfqr
— Eleanor Terrett (@EleanorTerrett) January 17, 2026
Through these exchanges, we understand that the White House’s support for the Clarity Act hangs by a thread, pending the outcome of negotiations between Coinbase and the banks. At the heart of this debate is the issue of granting returns on stablecoins.
Stablecoins: a decisive standoff between banks and the crypto industry over the sharing of Americans’ savings
The central question is whether the returns associated with holding stablecoins can be maintained, or whether the risk of diverting deposits from traditional savings accounts poses too great a threat to financial stability.
Revenues from stablecoins have become a key driver of the cryptocurrency market’s momentum. Coinbase has benefited from a significant influx of users and capital following a revenue-sharing agreement with Circle, the issuer of USDC.
Under this agreement, Coinbase receives all revenue generated by USDC held on its platform, as well as 50% of revenue generated by USDC on other platforms.
These factors show that this particularly lucrative market is of major strategic interest to Coinbase.
The Clarity Act appears to be a decisive regulation for the future of the cryptocurrency sector. It remains to be seen who will prevail in this power struggle: traditional finance or the crypto ecosystem?
