Introduction
Coinbase’s last-minute withdrawal of support forced the Senate Banking Committee to delay a crucial vote on landmark crypto market structure legislation, exposing deep fractures within the crypto industry over stablecoin yield restrictions backed by traditional banks. The abrupt move by CEO Brian Armstrong, declaring “no bill” better than “a bad bill” less than 24 hours before the scheduled markup, has left the legislation’s path forward—and its chances of passage—in serious doubt, splintering a once-unified industry coalition.
Key Points
- Coinbase's sudden opposition to banking-backed stablecoin yield restrictions caused the Senate Banking Committee to postpone a scheduled vote on comprehensive crypto legislation.
- The company's $116 million super PAC network and Washington influence allowed it to singlehandedly delay a bill supported by both GOP leadership and the White House.
- Key industry allies including Andreessen Horowitz and Ripple continue supporting the bill, creating a rare public split within crypto's Washington lobbying efforts.
A Last-Minute Revolt That Stopped the Senate
The Senate Banking Committee’s planned vote on comprehensive crypto market structure legislation was abruptly derailed Wednesday after Coinbase CEO Brian Armstrong announced his company would no longer support the bill as written. The move, coming less than 24 hours before the committee was due to send the legislation to the Senate floor, forced pro-crypto senators, including key architect Cynthia Lummis (R-WY), to delay the proceedings indefinitely. “Today’s response from some in the industry proves they are just not ready,” a disappointed Sen. Lummis stated, while pledging to continue negotiations.
Coinbase’s influence was starkly demonstrated by its ability to singlehandedly pause a legislative process backed by both GOP leadership and the White House. As one crypto policy insider told Decrypt, “They’re on an island here.” However, it is a formidable island: Coinbase is one of the industry’s most powerful forces in Washington and the principal funder, alongside Andreessen Horowitz and Ripple, of the Fairshake super PAC, which has amassed over $116 million for the 2026 elections.
The Core Conflict: Banking Lobby vs. Crypto on Stablecoin Yield
At the heart of the rupture is a fierce battle between crypto companies and the traditional banking lobby over stablecoin yield. The banking industry successfully pushed to include language in the market structure bill that would limit crypto companies’ ability to offer yield—rewards similar to interest payments—on stablecoin holdings. Stablecoins, tokens pegged to the dollar’s value, were formally legalized in July under the GENIUS Act, making their regulatory treatment a critical frontier.
Sources indicate that as of Tuesday, Coinbase had signaled willingness to accept the latest bill language on this issue. However, by Wednesday, it became clear that bipartisan amendments supported by the banking lobby, which would make the stablecoin yield provisions even more restrictive, were likely to pass during the committee’s markup. “Coinbase had a red line and made a judgement call,” a top crypto lobbyist explained. This perceived shift prompted Coinbase’s dramatic last-minute protest, a move that some in Washington view as having burned significant credibility. “Members of Congress don’t like getting played and don’t like having their time wasted,” a D.C. insider noted.
Industry Unity Fractures as Key Allies Diverge
Coinbase’s stance has exposed rare public fractures within the crypto industry’s delicate Washington coalition. While Cody Carbone of The Digital Chamber warned that “inaction is unacceptable,” other major players directly countered Armstrong’s position. Miles Jennings, Andreessen Horowitz’s top crypto executive, stated the bill “isn’t perfect” but must be passed. Ripple CEO Brad Garlinghouse, speaking in Switzerland, expressed surprise at Coinbase’s vehemence, noting, “The rest of the industry really is still leaning in and supporting it.”
The discord extends to the political arena. Patrick Witt, a top White House crypto advisor, accused pro-crypto Democrats—whose votes are essential for passage—of operating in “bad faith” and called the delay “disappointing.” This infighting jeopardizes the unified front needed to advance the complex legislation, which also involves the Senate Agriculture Committee for portions under the CFTC’s purview. A markup in that committee, penciled for January 27, is now also expected to be delayed.
An Uncertain Path Forward for Crypto Regulation
The immediate future of the market structure bill is now deeply uncertain. Brian Armstrong appeared on Capitol Hill Thursday, signaling a desire to return to negotiations, but the damage to the legislative momentum may be lasting. The delay grants more time for opposition to coalesce and complicates the already challenging path to a floor vote in a divided Senate.
One crypto policy leader, skeptical even before Coinbase’s move, summed up the predicament: “I still don’t know what the path forward is.” The episode underscores the high-stakes tension between an innovative industry seeking regulatory clarity and established financial interests shaping the rules of the road. With Coinbase isolated on its “island” and key allies like Andreessen Horowitz and Ripple charting a different course, the prospect of a landmark U.S. crypto law in this Congress has grown dimmer, leaving the industry’s coveted clarity once again out of reach.
📎 Related coverage from: decrypt.co
