Coinbase CEO Brian Armstrong pushed back against reports of a deepening rift with the Trump administration, insisting that cooperation on the CLARITY Act remains “very constructive.”
This follows a report by cryptocurrency journalist Eleanor Tellet, who said the administration was furious about the deal.
Polymarket predicts a 41% chance of passage of the CLARITY Act this year
According to the report, officials were prepared to withdraw support for the bill unless Coinbase compromised on stablecoin yields and returned to negotiations.
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At the center of the controversy is the fear of “deposit flight” in the traditional banking sector.
Regional and regional banks have warned that allowing crypto exchanges to offer high yields on stablecoins could accelerate deposit outflows. They argue that customers are moving funds from low-interest savings accounts to dollar-pegged digital assets, increasing risks to the bank’s stability.
But Armstrong disputed the notion that the White House was threatening to repeal the bill. Instead, he characterized the situation as a strategic directive from the government to address the unique concerns of regional financial institutions.
He said the White House has ordered exchanges to negotiate deals with banks and that specific details “will be announced soon.”
“In fact, we’re working on some good ideas about how we can specifically support community banks in this bill, because that’s what this bill is about,” Armstrong wrote on social media platform X.
The tensions highlight the weakness of a sweeping bill aimed at providing long-needed regulatory clarity to the digital asset industry.
Earlier this week, Coinbase indicated it may withdraw its support for the CLARITY Act. The exchange cited provisions such as banning tokenized stocks, restricting decentralized finance protocols, and eliminating stablecoin rewards.
Meanwhile, industry insiders are keeping a close eye on the outcome of the negotiations.
Ripple CEO Brad Garlinghouse said that while the legislative process is contentious, the Senate’s move is a “huge step forward” in protecting consumers and establishing a workable framework.
“Ripple (and I) know firsthand that clarity trumps confusion, and the success of this bill is a success for cryptocurrencies. We are at the table and will continue to move forward with a fair discussion.”
Despite this optimism, prediction markets remain skeptical about the schedule. On betting platform Polymarket, traders are currently pricing in just a 41% chance of the Market Structure Bill being passed by the end of this year.
