Cryptocurrency exchange Coinbase has reportedly told Senate offices that it cannot support the latest language included in the CLARITY Act, marking another setback for negotiations over the expected crypto market structure bill.
The dispute centers on recently revised provisions regarding stablecoin returns arrangements, a major point of contention that has been the subject of months of conversations on Capitol Hill.
Coinbase says no to late-stage compromises
The Senate’s updated text would limit the operation of stablecoin yield programs, restrict structures that attempt to mirror bank deposit products and tighten the permitted scope of other activities.
The draft leaves open questions about the mechanisms for classifying activity-based stablecoins and how transaction reward programs would be handled.
These uncertainties, combined with what some in the industry see as more restrictive language, have pushed Coinbase to do so inform lawmakers this week that it could not support the late-stage compromise language.
The move marks a softer but still consistent reversal from Coinbase CEO Brian Armstrong’s stronger opposition in January, which previously stalled the bill’s increase.
Industry divided over draft CLARITY Act
Beyond Coinbase, industry reactions to the new design have been mixed. One large trade association told Crypto In America, the revised language was a marked departure from what had been discussed with the White House, and was described as more restrictive for the crypto sector.
In contrast, another trade group leader characterized the provisions as largely in line with expectations, arguing that they struck an acceptable balance by preserving rewards while preventing interest-like stablecoin offerings.
“This is the best possible outcome,” that source said, noting that the new design appeared broader than an earlier proposal from Senators Thom Tillis and Angela Alsobrooks, and expressing confidence that “people will still get their rewards.”
Shares of Coinbase, trading under the ticker name COIN, closed Wednesday’s trading session at $181, down nearly 5% from its opening price above $190 per share.
Featured image from OpenArt, chart from TradingView.com