Chaos: Coinbase’s Defiance Risks White House Backing for US Crypto Bill

The push for clear rules in the US crypto world is hitting big roadblocks. The , a key bill to set market structure for digital assets, faces delays. Coinbase’s sudden pullback has upset many, including the White House. This drama shows how tough it is to balance industry needs with regulation.

What is the and Why Does It Matter?

The aims to define how crypto fits into US laws. It would split oversight between agencies like the SEC and CFTC. This could bring legal clarity, boost innovation, and attract investors. But recent fights have stalled progress.

Crypto firms want rules that let them grow without constant lawsuits. Users want safety and fair play. Banks worry about competition from stablecoins. Lawmakers must juggle all this.

Coinbase Pulls Support: The Stablecoin Yield Fight

Coinbase CEO Brian Armstrong shocked everyone by withdrawing support for the bill’s latest draft. He said, “I’d rather have no bill than a bad bill.” His main issue? New rules tied to the GENIUS Act. They ban stablecoin issuers from paying yield or interest to holders.

Coinbase makes a lot of money by giving ‘rewards’ to users holding stablecoins on its platform. These are like interest payments. Banks say this pulls deposits away from them, hurting traditional finance.

• Coinbase’s view: Yield helps users and keeps capital in crypto.
• Banks’ fear: Mass shift of money from bank accounts to exchanges.
• Critics’ take: It’s just banks in disguise, not true decentralization.

One expert online called it “the same banking model with a crypto logo.” Armstrong asked for clarity, but the reply was sharp: It’s about stopping exchanges from playing middleman.

White House Frustration Boils Over

Reports say the White House is angry at Coinbase’s solo move. A source close to the Trump team called it a “rug pull” on the industry and the administration. They say the bill is President Trump’s priority, not just Coinbase’s.

Journalist Eleanor Terrett reported the White House might drop support unless Coinbase strikes a yield deal with banks. Armstrong denied it was that bad, saying talks are ongoing. But Terrett stood firm, noting his words confirm the pressure.

White House crypto advisors like David Sacks and Patrick Witt have stayed quiet on details. Sacks said they remain committed to passing the bill soon.

Senate Drama: Committees Clash Over Jurisdiction

Senate Banking Chair Tim Scott canceled a key markup session after Coinbase’s exit. No new date yet. The Agriculture Committee moves ahead with its draft release on January 21 and markup on January 27.

Now, the Judiciary Committee is pushing back. Chairs Chuck Grassley and Dick Durbin sent a letter. They claim the bill touches criminal code on money transmitters without their input.

A big flashpoint: Exemptions for non-custodial DeFi developers. This comes from the Blockchain Regulatory Certainty Act (BRCA). It says software makers who don’t hold user funds aren’t money transmitters.

Judiciary worries this creates holes for crime. They cite Tornado Cash, where a co-founder was convicted for unlicensed money transmission. Recent hacks used Tornado Cash to launder $282 million in stolen BTC.

CLARITY could make prosecuting mixers and illicit DeFi harder, drawing in cartels and criminals.

They also fear impacts on fiat hawala networks using smart contracts. India reports rising ‘crypto hawala’ funding militants and crime.

Banking insists it’s their turf. If Judiciary feels ignored, they might block the bill on the Senate floor, needing 60 votes to pass.

Other Crypto News: BTC Reserves, Debanking, and Tokenized Assets

Samourai Wallet BTC Stays in US Reserves

No pardon yet for Samourai co-founder Keonne Rodriguez. But good news: DOJ won’t sell seized BTC. It joins the Strategic Bitcoin Reserve per Trump’s EO 14233. Advisor Patrick Witt confirmed this.

The SBR is a priority, but legal hurdles slow it. Crypto fans push for more BTC buys, maybe by revaluing gold reserves.

Trump Eyes Lawsuit Against JPMorgan

Trump hit back at reports on Truth Social. He plans to sue JPMorgan for debanking him after January 6. This ties to ‘Operation Choke Point 2.0,’ alleged pressure on banks to cut off conservatives.

Banks like JPM and BofA faced heat. Now, with Trump orders, debanking eases. But Florida probes JPM over Trump Media. Cato Institute says politics drives most cases.

NYSE Goes 24/7 with Blockchain

Big traditional finance news: NYSE plans a tokenized securities platform. Features include:

• 24/7 trading
• Instant on-chain settlement
• Stablecoin funding
• Multi-chain support

SEC and CFTC are crypto-friendly now. This could challenge Coinbase’s tokenized assets push. Coinbase fights back with stock trading via partners and bridges TradFi-crypto.

Goldman Sachs CEO David Solomon sees a long road ahead for bills like CLARITY.

What Happens Next for US Crypto Regulation?

Armstrong pushes on from Davos. Stakeholders met Democrats, but progress is slow. Risks include more demands, delays, or no bill at all.

Insights for crypto users:

• Clarity could unlock billions in investment.
• DeFi exemptions boost innovation but raise crime risks.
• Yield bans hit exchanges, push true DeFi.
• Tokenization blends stocks and crypto, 24/7 global access.

The industry needs compromise. Banks, exchanges, DeFi, and lawmakers must align. Without CLARITY, uncertainty lingers, slowing growth.

Watch Senate committees closely. A deal on yield and DeFi could revive momentum. Trump’s team wants wins, but won’t bend easily.

Final Thoughts

The saga highlights crypto’s growing pains. Coinbase’s stand protects its business but risks the bigger picture. As NYSE dives in, TradFi sees opportunity. Stay tuned—this could shape crypto for years.

What do you think? Will CLARITY pass? Share in comments.