Crypto Bill Hearing Postponed After Coinbase Pulls Support, Igniting Industry Rift

The Clarity Act — once seen as the long-awaited bridge to the future of cryptocurrency regulation — has hit a 300-pound roadblock named Brian Armstrong.

Just hours before the Senate Banking Committee was set to begin markup on the bill, Coinbase officially withdrew its support. Armstrong didn’t simply step away. He torched the bridge on his way out, calling the current draft “materially worse than the status quo.”

The impact was immediate. The Senate Banking Committee postponed the vote.

So why did the largest crypto exchange in the United States suddenly flip the table? According to Armstrong, there are three major deal-breakers.

First, the stablecoin yield ban. The bill includes a provision, heavily backed by bank lobbyists, that would prohibit exchanges from paying rewards on stablecoin holdings. Critics say it’s a protectionist move designed to shield traditional banks from competition. For Coinbase alone, the provision could eliminate billions of dollars in annual revenue.

Second, the tokenized equity ban. Armstrong argues the bill’s language amounts to a de facto prohibition on tokenized stocks — one of the most promising innovations in blockchain finance and a topic lawmakers were actively discussing just last week.

Third, what Armstrong calls a privacy nightmare. The draft includes DeFi-related restrictions that critics say would effectively give the government backdoor access to users’ private financial data, undermining one of crypto’s core principles.

But the industry isn’t unified. Companies like Ripple and Kraken are still backing the legislation, arguing that a flawed bill is better than no regulatory clarity at all.

That divide may be the bill’s biggest obstacle yet.

The bottom line: the crypto industry wants clarity — but right now, what it has is chaos.