Armstrong Denies White House Fury Over CLARITY Clash

Coinbase CEO Brian Armstrong pushed back hard against explosive claims that the Trump administration is threatening to abandon crypto's most critical legislative push. His response comes after reports suggested the White House labeled Coinbase's withdrawal from the CLARITY Act as a political "rug pull."

The controversy erupted when Eleanor Terrett reported on X that the White House was considering pulling support for the crypto market structure bill entirely if Coinbase didn't return to negotiations with a yield agreement satisfying the banks.

SCOOP: 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, a source close to the Trump administration tells me.

The source claimed officials were "furious" with Coinbase's "unilateral" action, stating: "This is President Trump's bill at the end of the day, not Brian Armstrong's."

Armstrong quickly fired back in a direct response on X, rejecting the characterization entirely.

In general, love your posts, but this is not accurate. The White House has been super constructive here. They did ask us to see if we can go figure out a deal with the banks, which we're currently working on. Actually, we've been cooking up some good ideas on how we can help the community banks specifically in this bill, since that's what this is about.

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Banks Fear $6 Trillion Deposit Exodus

The standoff centers on stablecoin yield provisions worth roughly $1 billion annually to Coinbase. Bank of America CEO Brian Moynihan warned that yield-generating stablecoins could drain $6 trillion from traditional bank deposits, squeezing liquidity and crippling lending to small businesses.

Armstrong framed the fight as regulatory capture, telling FOX Business it "just felt deeply unfair" that banks could use regulation to eliminate crypto competition. He pointed out banks pay just 14 basis points on savings while stablecoin rewards could boost earnings to 3.8%.

The Coinbase chief withdrew support for the Senate Banking Committee draft, citing provisions that would ban tokenized equities, restrict DeFi protocols, and eliminate passive yield on stablecoins. He also criticized a shift toward SEC oversight at the CFTC's expense.

Must read: Big Banks vs Crypto: Why The Clarity Act Just Hit A Wall

White House crypto czar David Sacks urged the industry to use the delay to "resolve any remaining differences," noting that "passage of market structure legislation remains as close as it's ever been."

Community Banks Take Center Stage

Armstrong emphasized that Coinbase is actively developing proposals specifically designed to address community bank concerns. He confirmed negotiations continue with both Republican and Democratic lawmakers, as well as regulators and banking institutions.

The CEO stressed that revised bill language could emerge within weeks, potentially addressing yield structures and consumer safeguards while protecting innovation. He maintained that Coinbase remains committed to clear regulation, but refuses to back legislation that would be "materially worse than the current status quo."

Industry reactions remain sharply divided. TD Cowen described Armstrong's opposition as "negative for crypto and positive for banks," warning it could derail congressional legislation entirely. Others argue that if banks fear competition, the solution is better consumer pricing rather than regulatory restrictions.

Related: Democrats Slam SEC's Crypto Case Closures Amid Trump Ties

The postponed Senate Banking Committee markup throws the bill's immediate future into uncertainty. With midterm election dynamics looming, lawmakers face a narrowing window to advance market structure clarity before political calendars shift.

Despite the tension, Armstrong expressed optimism about future cooperation with policymakers. He emphasized transparency, collaboration, and consumer protection as guiding principles while markets wait for clearer regulatory signals that could shape US crypto regulation for years.

Ripple CEO Brad Garlinghouse weighed in, noting the legislative process is contentious but represents a "massive step forward" for the industry. "Clarity beats chaos, and this bill's success is crypto's success," he stated.

Check out: Ripple Crushes SEC: Is History About To Repeat?

The broader question remains whether stablecoin yield represents innovation worth protecting or a systemic risk to traditional banking. As negotiations continue behind closed doors, the trillion-dollar political fight over crypto's regulatory future hangs in the balance.