White House May Drop Support for Crypto Bill

The White House is considering withdrawing support for a major crypto regulation bill after Coinbase suddenly withdrew its support.

A source close to the Trump administration said officials were caught off guard by Coinbase’s decision. The administration is reportedly angry, calling Coinbase’s move a “tear-off” that would hurt not only the White House but the crypto industry as a whole.

Officials say Coinbase failed to notify them before going public with its opposition. For this reason, the White House may move away from the Digital Asset Market Clarity Act altogether. However, the administration could remain involved if Coinbase resumes negotiations and agrees to a compromise.

🚨SCOOP: White House considers withdrawing support for crypto market structure bill entirely if @coinbase does not come back to the table with a yield agreement that satisfies the banks and brings everyone to an agreement, a source close to the Trump administration tells me.…

– Eleanor Terrett (@EleanorTerrett) January 17, 2026

The biggest sticking point is around stablecoins, particularly the rules around yield-bearing stablecoins. Banks fear that allowing stablecoins to offer returns of around 5% could take money away from traditional savings accounts. The source emphasized that this is a “bill from President Trump,” and not a project controlled by Coinbase or its CEO, Brian Armstrong.

Why Coinbase opposes the crypto market structure bill

Coinbase says it withdrew its support because the bill, in its current form, could harm the crypto industry. Armstrong said it’s better to have no bill than a bad one. He raised concerns that the proposal could effectively ban tokenized stocks, impose heavy restrictions on decentralized finance (DeFi), and give the government broader access to users’ financial data, which could harm privacy.

Armstrong also warned that the bill weakens the Commodity Futures Trading Commission while giving more power to the Securities and Exchange Commission. The SEC has faced heavy criticism from the crypto industry for relying heavily on enforcement measures rather than clear rules.

Reactions within the crypto community are mixed. Some support Coinbase, saying lawmakers are protecting banks at the expense of innovation. Others argue that Coinbase is just an exchange and should not have the power to block legislation that affects the entire crypto industry.

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