White House tensions with major crypto players are putting landmark U.S. crypto legislation at risk, as internal frustration, banking pressure, and stalled negotiations threaten to derail a market structure bill shaping the industry’s regulatory future.
Trump Administration Said to Reconsider Crypto Support
Rising friction inside Washington is threatening progress on crypto legislation, as the White House weighs its next steps amid growing disagreements with industry participants over how a market structure bill should move forward.
Citing a source close to the Trump administration, Eleanor Terrett of Crypto In America shared a scoop on social media platform X on Jan. 16:
“The White House is considering pulling its support for the crypto market structure bill entirely if Coinbase does not come back to the table with a yield agreement that satisfies the banks and gets everyone to a deal.”
The post outlined a conditional scenario in which administration backing for the legislation could hinge on whether negotiations resume around yield-related provisions that meet banking sector expectations. Those provisions have become a focal point because of their implications for regulatory treatment, capital exposure, liquidity management, and supervisory oversight for crypto-linked financial products, areas where banks and policymakers have remained cautious despite broader interest in market clarity.
Coinbase pulled its support for the landmark crypto market structure bill on Wednesday, Jan. 14, a development that was followed by the Senate Banking Committee’s decision to postpone its scheduled markup of the legislation. CEO Brian Armstrong announced the reversal on X, stating that the company would “rather have no bill than a bad bill,” specifically citing a “de facto ban on tokenized equities” and new prohibitions on decentralized finance ( DeFi) as deal-breakers. Beyond these structural issues, the primary point of contention involves “yield-related” provisions. Coinbase objects to amendments, heavily lobbied for by the banking sector, that would effectively eliminate the “rewards” exchanges pay to stablecoin holders. While banks argue these rewards trigger “deposit flight” from traditional accounts, Coinbase maintains that the restrictions are an anti-competitive attempt by the banking lobby to “kill the competition” and stifle the efficiency of digital asset markets.
The journalist shared additional details on X, quoting the source as describing heightened anger inside the administration, writing:
“The White House is said to be furious with Coinbase’s ‘unilateral’ action on Wednesday, which it apparently was not notified of in advance, calling it a ‘rug pull’ against the White House and the rest of the industry. The White House does not believe that one company speaks for the entire industry.”
The remarks reflected concerns that unilateral industry actions could undermine broader negotiations involving exchanges, custodians, infrastructure providers, and traditional financial institutions. The episode underscores the challenges of aligning diverse industry interests under a single regulatory framework as lawmakers continue to debate how best to structure oversight for U.S. crypto markets.
FAQ ⏰
- Why is the White House frustrated with Coinbase?
Officials reportedly believe Coinbase acted unilaterally without warning during sensitive crypto market structure negotiations. - What could cause the White House to pull support for the crypto bill?
Support may be withdrawn if yield-related provisions fail to satisfy major banks and regulators. - What role do banks play in the crypto market structure bill?
Banks are focused on yield, balance sheet exposure, liquidity planning, and supervisory oversight. - Why is the crypto market structure bill politically significant?
Sources say the legislation is viewed internally as President Trump’s bill, not an industry-led effort.