President Donald Trump declared on Wednesday at the World Economic Forum in Davos that he wants to sign the Cryptocurrency Market Structure Act “right away.” But the bill remains stalled in Congress, underscoring the widening gap between the president’s ambitions and legislative reality.
A standoff between Coinbase and bank lobbyists over stablecoin yields threatens to derail what lawmakers say is a once-in-a-generation regulatory framework that could push crypto businesses overseas by two years.
Sponsored Sponsored
Trump: “Bitcoin, everything”
“Right now, Congress is hard at work on the Cryptocurrency Market Structure Act, and I look forward to signing it soon, paving the way for a new path to economic freedom,” President Trump said in Davos. Reading his prepared remarks, the president briefly looked away from the teleprompter and added, “Bitcoin, that’s what it’s all about.”
The statement came just days after the Senate Banking Committee abruptly halted a planned price increase. President Trump’s remarks can be interpreted as a direct pressure campaign against members of Congress.
Banking Committee delayed, Agriculture Committee moving forward
The Cryptocurrency Market Structure Bill is being processed simultaneously in two Senate committees. The Banking Committee oversees securities-related regulations, and the Agriculture Committee is responsible for commodity regulation. Both bills must be passed and consolidated before reaching the full Senate.
The Banking Committee postponed last week’s price increase after Coinbase withdrew its support. This week, the committee shifted its focus to President Trump’s housing affordability push. The virtual currency bill is currently expected to be announced in late February or March.
Meanwhile, Senate Agriculture Committee Chairman John Boozman released the text of the Digital Goods Intermediary Act on Wednesday, confirming that the committee will move forward with the Jan. 27 rate hike. But Boozman acknowledged that bipartisan negotiations with Sen. Cory Booker failed to reach an agreement.
Sponsored Sponsored
Key conflict: Stablecoin yields
Coinbase’s objections center on provisions related to stablecoin yields. The GENIUS Act, signed by President Trump last year, allows stablecoin holders to earn rewards, essentially interest payments. These yields could exceed traditional bank deposit rates, and banking industry lobbyists are pushing for limits in new market structure legislation.
Coinbase CEO Brian Armstrong withdrew his support, saying, “No invoice is better than a fraudulent invoice.” In an interview with Bloomberg at Davos, Armstrong said: “The bank lobbies and banking associations are trying to ban competition, and I don’t condone that at all. I think that’s un-American.”
White House hits back at Coinbase
The White House reacted sharply. Patrick Witt, executive director of President Trump’s Digital Assets Council, publicly criticized Armstrong’s stance.
“‘No bill is better than a bad bill.’ What an honor to be able to say these words because of President Trump’s victory and the pro-crypto administration he has created,” Witt said.
Sponsored Sponsored
He warned that if crypto industry players block the bill’s passage now, they will be “fumbling with the ball” and could have dire consequences.
Lawmakers fear falling behind.
In interviews with Fox Business, lawmakers expressed growing frustration with the bill’s stalling. Sen. Cynthia Lummis (R-Wyo.), a leading cryptocurrency advocate who is retiring next year, expressed her disappointment: “I feel like Flat Stanley after being hit by a Mack truck. I have 11 months left to tackle this problem and get it done.”
Blockchain Association CEO Peter Smith warned: “If this is not passed now, we have already been working on it for about a year and a half, but there will be a significant delay after the midterm elections, which realistically means another two years of delay.”
Rep. William Timmons (R-S.C.) emphasized the economic stakes, saying, “If Congress establishes the right framework, tens of billions of dollars will come back to the United States. Otherwise, everything related to cryptocurrencies could flow overseas.”
Sponsored Sponsored
While lawmakers are deliberating, the market is already making progress. The New York Stock Exchange has announced plans to launch a blockchain-based tokenized securities trading platform featuring instant settlement and 24/7 operations.
Sen. Thom Tillis (R-North Carolina) expressed the urgency: “If we want to remain the gold standard of global banking, we must also treat cryptocurrencies properly, because they are definitely part of the future of leading banking systems.”
what’s next
The battle lines are clear. The Trump administration wants it to pass quickly, Coinbase treats stablecoin yield limits as a red line that should not be crossed, and bank lobbyists are pushing for the limits to remain in place.
The Agriculture Committee bill focuses on the CFTC’s jurisdiction over digital commodity spot markets and does not directly address the issue of stablecoin yields, suggesting that the Jan. 27 price increase will go ahead. However, the Banking Committee bill would need to be passed and integrated with the Banking Committee bill to achieve a complete market structure framework.
The resolution of the conflict between Coinbase and banking lobbies over stablecoin yields remains a key variable. Despite pressure from the White House, Armstrong shows no signs of backing down.
