Coinbase CEO Brian Armstrong has launched a public defense of his decision to withdraw support for the Digital Asset Market Clarity Act, a move that has reportedly left the White House “furious.” Sources close to the Trump administration described the sudden shift as a “rug pull” against both the administration and the crypto industry, occurring just hours before a critical Senate Banking Committee markup session, The Block said in a report.
In response, administration officials have signaled that they may fully abandon the legislation unless Coinbase returns to the negotiating table with a stablecoin yield agreement that satisfies the concerns of traditional banking interests.
The primary point of contention involves the ability of crypto platforms to offer interest-like rewards on stablecoin balances. Banking groups have lobbied heavily for restrictions, arguing that high-yield stablecoins could trigger a “deposit flight” from traditional savings accounts, potentially destabilizing community banks.
For Coinbase, the stakes are directly tied to its bottom line; S&P Global recently projected that the exchange’s stablecoin-related revenue could exceed $1 billion in 2025. Armstrong has characterized these legislative restrictions as “regulatory capture,” accusing the banking lobby of trying to eliminate competition rather than competing on a level playing field.
Beyond the stablecoin dispute, Armstrong highlighted several “red line” issues in the Senate’s revised draft that he claims would make the status quo preferable to the new law. He cited a perceived “de facto ban” on tokenized equities and new Decentralized Finance (DeFi) prohibitions that he argues would grant the government “unlimited access” to private financial records.
Furthermore, he expressed concern over the erosion of the Commodity Futures Trading Commission’s (CFTC) authority in favor of the Securities and Exchange Commission (SEC), a shift the industry has long resisted.
The withdrawal of support from the nation’s largest regulated exchange has thrown the bill’s future into deep uncertainty. While White House crypto czar David Sacks has urged all parties to resolve their differences during the current delay, the legislative window is rapidly closing as midterm election dynamics begin to dominate the calendar.
Armstrong maintains that while Coinbase remains open to a deal, the current draft is “materially worse” than no regulation at all, famously stating on social media that the company would “rather have no bill than a bad bill.
