Cryptocurrency bill under threat: White House furious over Coinbase withdrawal

Journalist Eleanor Terrett reports that President Donald Trump’s administration is considering completely withdrawing support for a draft law that would build a digital currency market if Coinbase does not return to the negotiating table.

The White House expects the company to reach a more favorable deal that will satisfy the banks and lead to a final settlement, according to sources close to the administration.

Teret added that the White House was angry about Coinbase’s unilateral decision on Wednesday because the platform did not notify the government in advance.

According to sources, the administration described the move as like pulling the rug out from under it and the rest of the cryptocurrency industry, while confirming that this is ultimately Trump’s bill, not Brian Armstrong’s.

Coinbase this week withdrew its support for a draft of the project, accusing the bank of pushing for amendments that undermined users’ ability to earn returns on the stablecoin.

CEO Brian Armstrong raised a number of objections to the current version, the most prominent of which are:

I believe that a virtual ban on tokenized stocks, restrictions on DeFi (giving governments broad access to financial records and weakening privacy), reducing the power of the Commodity Futures Trading Commission (CFTC) in favor of the Securities and Exchange Commission (SEC), in addition to amendments that may eliminate stablecoin incentives, give banks greater ability to stifle competition.

Coinbase’s stance has sparked controversy inside and outside the industry.

Some parties remain cautious, while entities such as Citron Research have accused Armstrong of hindering the project, given that his motivations may be related to concerns about competition from tokenized securities firms and the pursuit of regulatory clarity without opening the door to new competitors.

Relatedly, the Senate Banking Committee postponed a meeting scheduled to discuss the draft on January 15 but has not yet specified an alternative date.

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