The Senate Banking Committee delayed the anticipated markup of its crypto market structure bill draft, prompting the Agriculture Committee to take action. The Agriculture Committee is set to release its own version of the bill’s draft today, just ahead of a crucial vote scheduled for next week.

Coinbase Faces Pressure To Negotiate Yield Deal

Eleanor Terret, a reporter with Crypto In America who has been closely monitoring congressional developments regarding cryptocurrency, reported that staffers from the Banking Committee hope a successful bipartisan agreement spearheaded by their counterparts in the Ag Committee could facilitate a smoother markup process.

The responsibility now largely falls on Coinbase—whose sudden withdrawal of support for the bill contributed to the halt in the markup process—to negotiate a deal with banking leaders on yield. At the same time, Binance and Ripple’s leadership have expressed support for the bill’s latest version during their appearance in Davos. 

Coinbase CEO Brian Armstrong expressed his apprehensions regarding the implications of the bill last week. He raised concerns that the legislation could prohibit tokenized equities, impose restrictions on decentralized finance (DeFi), and expand government access to financial data, potentially sacrificing individual privacy. 

The executive also cautioned that the bill could shift regulatory power from the Commodity Futures Trading Commission (CFTC) to the Securities and Exchange Commission (SEC), which may eliminate stablecoin rewards and hinder competition within the crypto sector.

President Trump Optimistic About Crypto Market Bill

Adding to the tension, Patrick Witt, Executive Director of the White House Crypto Council, took to social media late Tuesday to criticize Coinbase, warning that the delay in the market structure bill could invite stricter regulations under an administration less favorable to digital assets. 

Witt’s remarks seemed to corroborate reports from Crypto In America indicating that the White House is frustrated with Coinbase’s withdrawal, which has contributed to the legislative stall.

In a related note, President Donald Trump acknowledged the ongoing efforts surrounding the market structure legislation during his speech in Davos on Wednesday. 

He expressed hope that Congress would finalize the bill soon, stating, “Congress is working very hard on crypto market structure legislation, which I hope to sign very soon, unlocking new pathways for Americans to reach financial freedom.”

Featured image from OpenArt, chart from TradingView.com 

Cryptocurrency exchange Coinbase (COIN) recently retracted its support for the latest iteration of the crypto market structure bill, known as the CLARITY Act, just 24 hours before a crucial markup was scheduled. 

This signals significant concerns about the bill’s alignment with the interests of cryptocurrency firms compared to traditional banking institutions, not only for the exchange but also for broader market participants.

Coinbase CEO’s Concerns Over Fair Competition

On Friday, Coinbase CEO Brian Armstrong elaborated on the rationale behind the exchange’s withdrawal in an appearance on FOX Business, expressing his frustration with the notion that banks could use regulatory means to stifle competition in their favor. 

“It just felt deeply unfair to me that one industry [banks] would come in and get to do regulatory capture to ban their competition,” Armstrong stated. He also underscored the importance of a level playing field, asserting that competition should thrive without undue interference from powerful financial entities.

Coinbase CEO emphasized that his concerns resonate with “much of the industry,” highlighting his obligation to advocate for customers who he believes are being shortchanged by the provisions of the proposed market legislation. 

“I declined to opine on the exact—whether the hearing, the markup should happen or not… But I did feel like I had to speak up on behalf of our customers and all Americans here,” he articulated.

Debate Heats Over CLARITY Act

Central to the ongoing debate surrounding the CLARITY Act is a critical disagreement between banks and crypto firms regarding the fate of stablecoin holders and whether they should be entitled to receive reward payments. 

Armstrong has previously raised alarms that the bill might prohibit tokenized equities, impose restrictions on decentralized finance (DeFi), and expand governmental access to financial data, thereby compromising individual privacy. 

Furthermore, he warned that the legislation could shift regulatory authority away from the Commodity Futures Trading Commission (CFTC) and towards the Securities and Exchange Commission (SEC), sidelining competition within the crypto space.

Armstrong Critiques Banking Lobbying Tactics

Armstrong noted the irony in the current situation, pointing out that while banks are indeed leveraging the advantages of cryptocurrency, their lobbying efforts seem aimed at restricting competing firms. 

“Many of these banks are actually very smart,” he acknowledged, referencing the commercial side of banking that is increasingly engaging with crypto. “They’re actually doing deals with Coinbase. We’re powering a lot of crypto and stablecoin infrastructure for them on the commercial side.”

Despite his criticisms of the banking sector’s lobbying tactics, Armstrong expressed optimism that legislators could ultimately resolve the outstanding issues within the crypto market structure bill:

And then their lobbying arm comes to D.C. and thinks of it as very zero-sum and is trying to kill the competition. So, I suspect, like many things, if we get the principles in the room, we can actually get this figured out and make a good deal.

Featured image from DALL-E, chart from TradingView.com