Coinbase accused of “rug pull” as the White House weighs killing the CLARITY Act over yield
Coinbase CEO Brian Armstrong publicly sparred with crypto reporter Eleanor Terrett this week after she questioned the alternate’s stance on crypto regulation, prompting an alternate that shortly spilled onto social media and reignited tensions between trade leaders and the broader group.
Senate Banking postponed its deliberate Jan. 15 markup of the CLARITY Act, leaving timing for Senate motion on H.R. 3633 depending on continued negotiations over language that would form whether or not stablecoin rewards are handled as deposit-like yield.
The committee’s government session itemizing for Jan. 15 is labeled “POSTPONED” and “Status: POSTPONED” on the panel’s schedule page. No alternative date was posted in the committee document supplied.
Chairman Tim Scott mentioned the markup could be delayed “as bipartisan negotiations proceed.” He added, “everybody stays at the desk working in good religion,” in response to his statement.
The delay interrupts a legislative path that had seemed linear after the House approved H.R. 3633 by a 294-134 vote on July 17, 2025. It was then despatched to the Senate, the place it was obtained Sept. 18, 2025, and referred for consideration.
Senate Banking’s majority employees introduced on Jan. 9 that the committee would maintain a markup on Jan. 15. The announcement framed the session as an upcoming step for digital asset market construction laws, in response to the majority’s notice.
With the committee citing ongoing talks, the procedural pause is now intertwined with a product dispute that locations stablecoin rewards close to the middle of lobbying strain. Brian Armstrong, Coinbase’s CEO, wrote in an X put up that “draft amendments” would “kill rewards on stablecoins.”
Armstrong added, “We’d quite haven’t any invoice than a foul invoice”. Coinbase withdrew help for the Senate push shortly earlier than the markup and tied the dispute to stablecoin rewards and coalition timing.
Stablecoin rewards and the deposit-like yield debate
Banks have argued that reward-bearing stablecoins can perform like deposits. That framing treats “rewards” as a consumer-facing yield product that competes with financial institution funding.
Bank have considerations that some tokens pay reward charges resembling high-yield deposits round 3.5%.
That charge reference issues for lawmakers as a result of yield mechanics may be applied at completely different layers of the stack. Those embody issuer packages, alternate packages, and wallet-linked incentives, every carrying completely different shopper expectations and regulatory implications.
Coinbase’s personal documentation illustrates how “rewards” may be structured with program situations quite than framed as a deposit rate of interest. Coinbase assist supplies describe “Boosted Rewards” tied to USDC, together with a base reward charge and “boosted” tiers based mostly on participation necessities.
Those particulars are specified by Coinbase’s help documentation. For Senate negotiators drafting guardrails, that distinction can drive whether or not any restriction bans specific “curiosity,” restricts advertising and marketing and pass-through yield, or limits particular reward pathways seen as bank-like.
At the identical time, negotiators might purpose to protect room for incentive packages that don’t resemble insured deposit accounts. The query is whether or not lawmakers draw the line at the stablecoin degree, the alternate degree, or each.
White House leverage claims add uncertainty to the coalition
The political overlay intensified as a declare about White House leverage circulated alongside the committee’s delay.
Eleanor Terrett posted on X, citing an unnamed supply, that the White House was contemplating pulling help until Coinbase returned to the desk with an settlement on yield that satisfies banks.
“The White House is alleged to be livid with Coinbase’s “unilateral” motion on Wednesday, which it apparently was not notified of prematurely, calling it a “rug pull” in opposition to the White House and the relaxation of the trade. The White House doesn’t imagine that one firm speaks for the whole trade, the supply continued.”
The identical declare was amplified by way of reprints and commentary, altering perceptions of the invoice’s coalition energy even with out official affirmation.
Separately, Erik Voorhees echoed Armstrong’s “no invoice” posture with profanity, reflecting that some components of the crypto constituency could want legislative delay to constraints on reward fashions.
Armstrong, straight referred to as out Terrett in a reply.
In normal, love your posts, however this isn’t correct. The White House has been tremendous constructive right here.
They did ask us to see if we will go work out a cope with the banks, which we’re at present engaged on.
Actually, we have been cooking up some good concepts on how we can assist the group banks particularly on this invoice, since that is what that is about…..the group banks, proper? More coming quickly.
Terrett hit again, claiming Armstrong had validated her reporting, stating,
“My reporting was hermetic and correct.
You additionally simply cited the central level of my story as right: that the White House requested Coinbase to go safe a deal on yield. My reporting is that WH help now seems to be contingent on that end result.”
The committee’s postponement means the negotiation observe, quite than formal modification votes, will doubtless decide when and the way the concern is resolved.
Scale, calendar constraints, and potential paths ahead
The coverage stakes lengthen past the present markup as a result of the definition of allowable rewards would scale with stablecoin provide and distribution. DeFiLlama knowledge put the stablecoin market capitalization at about $311.563 billion at retrieval.
Citi’s GPS analysis projected stablecoin issuance of $1.9 trillion in a base situation and $4.0 trillion in a bull situation by 2030. The framework additionally tied transaction exercise to velocity assumptions such as 50x, making distribution economics and stability retention central to enterprise fashions, in response to Citi GPS.
Under these magnitudes, even slim drafting adjustments round what constitutes “rewards” might shift which intermediaries seize spreads and buyer relationships. The listing of potential winners and losers consists of banks, exchanges, and cost companies.
In the close to time period, the markup calendar turns into the arduous constraint. Senate Banking’s schedule exhibits solely the postponed standing for Jan. 15 and doesn’t listing a rescheduled government session in the supplies right here.
Scott’s assertion retains negotiators’ give attention to a deal path quite than a reset. That means the subsequent observable step for market contributors is a revised date or a brand new draft that resolves the yield dispute with out shedding votes wanted to advance the invoice.
Several legislative outcomes stay in line with the document now accessible. One path is a rewrite that constrains deposit-like yield whereas allowing narrowly outlined incentive packages, utilizing definitions and disclosures that separate bank-like merchandise from platform advertising and marketing.
A second path is an extended delay if negotiators can’t agree on whether or not rewards ought to be restricted at the stablecoin degree, the alternate degree, or each. That danger seems elevated the place packages resemble shopper financial savings yields and trade teams publicly sign a willingness to just accept delay.
A 3rd path is the invoice shifting with some trade help even when a big alternate stays opposed. That end result would align with reporting that coalition dynamics had been already strained round the markup window.
Market contributors monitoring likelihood are additionally watching sentiment venues that outline decision off official sources. Polymarket listed a 2026 CLARITY Act end result contract that references Congress.gov and official authorities sources for settlement, although the market worth itself will not be an official forecast.
For merchants and compliance groups, that settlement language makes the subsequent committee posting and any up to date invoice textual content extra related than social-media claims, since official actions drive each legislative progress and contractual decision standards.
For now, the solely formal change is procedural and documented: Senate Banking postponed the Jan. 15 CLARITY Act markup whereas negotiations proceed. The committee has not posted a brand new date in the sources accessible right here.
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