The White House is weighing whether to withdraw backing for a major crypto market structure bill following a public rift with Coinbase over the draft legislation.
Coinbase recently pulled its support for the Digital Asset Market Clarity Act, also known as the CLARITY Act, citing concerns that the proposal would harm parts of the digital asset sector.
According to a report by Fox Business journalist Eleanor Terrett, a source close to the Trump administration said the White House was angered by Coinbase’s decision.
The source claimed the administration viewed the move as unexpected and damaging to ongoing negotiations with lawmakers and industry stakeholders.
In a post shared on X, Terrett said the White House felt blindsided by what it described as a unilateral withdrawal of support.
The White House is said to be furious with Coinbase’s ‘unilateral’ action, which it apparently was not notified of in advance, calling it a ‘rug pull’ against the White House and the rest of the industry.
Eleanor Terrett said.
The source added that the administration could abandon the bill entirely unless Coinbase returns to talks and accepts compromises.
Stablecoin yield provisions were highlighted as a key sticking point, with banking groups pushing back against features they see as competitive threats.
This is President Trump’s bill at the end of the day, not Brian Armstrong’s.
The source said.
Coinbase’s withdrawal has injected fresh uncertainty into the future of the proposed crypto framework.
On Wednesday, Coinbase chief executive Brian Armstrong publicly explained why the company could not support the current draft.
Armstrong argued that the bill, as written, would do more harm than good to the industry.
We’d rather have no bill than a bad bill. Hopefully we can all get to a better draft.
Brian Armstrong said.
He warned that the proposal could amount to a de facto ban on tokenised equities.
Armstrong also raised concerns about broad restrictions on decentralised finance, commonly referred to as DeFi.
He said expanded government access to financial records could weaken user privacy protections.
The draft was also criticised for shifting power away from the Commodity Futures Trading Commission.
Armstrong claimed the changes would consolidate more authority under the Securities and Exchange Commission.
The SEC has faced repeated criticism from crypto firms for relying heavily on enforcement actions.
Stablecoins emerged as another major flashpoint in the debate around the bill.
Armstrong warned the legislation could effectively end rewards paid to stablecoin holders.
Banking industry groups have argued that stablecoin yields of around 5% could pull deposits from traditional savings accounts.
The dispute has split opinion across the wider crypto community.
Some users backed Coinbase, accusing lawmakers and banks of protecting incumbents.
Then the banks should stop trying to screw everyone over.
Nic Carter said.
Others pushed back against Coinbase’s stance, arguing no single exchange should dominate policy outcomes.
One user wrote that Coinbase represents only one company within a much broader crypto ecosystem.
With negotiations strained, the fate of the CLARITY Act remains uncertain as political and industry tensions grow.