Coinbase Ends Support for Revised CLARITY Act: US Crypto Regulation Hits Major Delay

Coinbase’s Bold Move Shakes Up Crypto Legislation

In a surprise turn, Coinbase has pulled its support for the Senate’s version of the . This key bill aims to set clear rules for crypto markets in the US. The decision has delayed a vote in the Senate Banking Committee. It puts US crypto reform at a crossroads.

The seeks to define how digital assets are regulated. It would split oversight between the SEC for securities-like tokens and the CFTC for others, like commodities. But changes in the Senate draft upset Coinbase. Now, the path to clear crypto rules looks bumpy.

What Changed in the Senate Draft?

Coinbase listed four big issues with the revised bill:

• Tokenized Equities Limits: The new text curbs blockchain-based stocks and shares. This could slow growth in digital securities, a hot area linking old finance to crypto.
• DeFi Data Access: It forces some decentralized finance (DeFi) platforms to share transaction data under anti-money laundering laws. Coinbase says this hurts DeFi’s open design and adds heavy costs.
• SEC Power Boost: The draft gives more control to the SEC over crypto. This might bring back old uncertainties from past crackdowns.
• Stablecoin Rules Favor Banks: Provisions could let big banks block rivals and hurt crypto payment tools.

These shifts moved the bill far from the House version Coinbase liked. Hours before the markup, Coinbase said no. This forced a postponement.

Reactions from Lawmakers and Industry

Senate leaders called it a pause, not a failure. They say talks continue across parties. Senator Cynthia Lummis stressed the need for federal crypto standards.

The White House backs the bill too. Officials say it’s closer to passing than ever. They urge fixes during this break.

Not everyone agrees with Coinbase. Ripple sees progress and wants compromise. Chris Dixon from Andreessen Horowitz notes flaws but warns delays hurt US leadership. Kraken’s Arjun Sethi calls it a test of will.

This shows a split: exchanges like Coinbase worry about their models, while others push for any rules over none.

Why the Matters for Crypto

US crypto lacks a unified framework. Right now, rules vary by agency and state. This confuses firms and scares investors.

The bill would:

• Set clear asset definitions.
• Protect users with custody and disclosure rules.
• Boost competition in payments and trading.

Without it, fraud risks stay high. Startups struggle with compliance. Big players hesitate on crypto products.

Global Race Heats Up

Other places move faster. Europe has MiCA rules. The UK and Asia offer licenses and protections. US delays could push firms and money abroad.

Institutional money waits for clarity on custody and trading. Tokenized assets and stablecoins hang in balance. These could transform stocks, bonds, and cross-border payments.

Deeper Tensions in Crypto World

The fight isn’t just Coinbase vs. Senate. It’s exchanges vs. infrastructure firms. Some want DeFi free; others seek bank-friendly rules.

Stablecoins power remittances and fast payments. Bank-favoring rules could kill crypto edges like low fees and speed.

Data rules hit wallets and protocols hard. Open-source projects aren’t built for bank-like reporting.

What Happens Next?

Talks go on behind doors. Committees must align. Bipartisan support is key.

Coinbase might return if changes happen. Others ramp up lobbying.

Timeline? Uncertain. Weeks or months. Inaction costs: lost innovation, fleeing capital, weak global spot.

Lessons for Crypto Firms

This shows policy’s power. Firms must engage early. Compromise builds bridges.

For users, clear rules mean safer markets. But overreach could stifle growth.

Final Thoughts

Coinbase’s exit spotlights risks in the push. US crypto needs reform bad. Can leaders bridge gaps? Watch for updates. The stakes are high for markets, innovation, and leadership.

Stay tuned as this unfolds. Crypto regulation shapes the future.