Coinbase CEO Brian Armstrong has pushed back against reports that the White House dropped support for the CLARITY Act, stating that discussions with the administration remain constructive. In a post on X on Sunday, Armstrong said the White House had asked Coinbase to explore a compromise with banks, particularly regional lenders, and those talks are now underway.
Core Dispute: Stablecoin Yields and DeFi Limits
The CLARITY Act seeks to define regulatory boundaries for digital assets in the U.S., covering exchanges, DeFi platforms, stablecoins, and tokenized assets. Coinbase withdrew its support earlier in January, citing concerns in the latest Senate draft that could restrict DeFi activity, block tokenized equity products, and prevent stablecoin issuers from offering yield-like rewards. Armstrong also flagged expanded government access to financial data and a shift in regulatory authority toward the SEC at the expense of the CFTC.
The withdrawal had immediate consequences: a scheduled Senate Banking Committee markup session was postponed to allow more time for negotiations, slowing the bill's progress after it had passed the House in 2025. Stablecoin yields emerged as a key sticking point, with banks arguing that crypto-issued returns could draw deposits away from the banking system.
Negotiations Resume: Banks Play Key Role
Despite reports that the White House was frustrated by Coinbase's move — journalist Eleanor Terrett cited an anonymous source calling it a betrayal — Armstrong said there is no breakdown in relations. He described recent White House talks as "super constructive" and said the administration is focused on balancing crypto innovation with traditional financial institutions' concerns. Terrett stood by her reporting after Armstrong's response.
Industry sentiment remains divided. Some executives argue that passing a compromised bill would still provide much-needed regulatory clarity, while others warn that locking in restrictive language could damage the sector for years. Revised language is expected to be discussed in the coming weeks as lawmakers seek a deal that can move in the Senate, with potential finalization in early 2026.