What was supposed to be Washington’s defining crypto compromise is now at risk of unraveling, as a political standoff emerges between the White House and one of the industry’s most powerful players.
Behind closed doors, US officials are reassessing whether to keep backing the Digital Asset Market Structure Framework, a bill meant to finally standardize how crypto is regulated nationwide. The hesitation isn’t coming from lawmakers alone – it’s being driven by growing frustration inside the White House after a breakdown in relations with Coinbase.
Key Takeaways
The White House is reconsidering its support for a major US crypto market structure bill after a breakdown with Coinbase.
Coinbase’s public opposition stalled Senate momentum and exposed deep divisions over stablecoins, tokenized assets, and regulatory power.
Without industry unity, the future of comprehensive US crypto regulation is now uncertain.
According to reporting from Eleanor Terrett, senior officials are openly discussing whether continued support makes sense if key industry players refuse to cooperate. The message being weighed is blunt: if Coinbase walks away, the White House may walk too.
When industry support turns into leverage
For months, the bill was framed as a rare point of alignment between regulators, lawmakers, and the crypto sector. That balance shifted abruptly when Coinbase CEO Brian Armstrong publicly rejected the draft, arguing it entrenches outdated financial rules rather than modernizing them.
Armstrong’s objections cut across multiple fault lines. He warned that the framework sidelines stablecoin yield products, effectively blocks tokenized equities, grants sweeping access to user financial data, and cements the dominance of the Securities and Exchange Commission over the Commodity Futures Trading Commission. His conclusion was stark: better to scrap the bill than lock in what he sees as structural flaws.
Capitol Hill hits the brakes
The fallout was immediate. Lawmakers delayed a planned Senate Banking Committee markup that had been expected to push the bill forward in mid-January. The pause signaled that momentum had evaporated almost overnight.
Coinbase’s stance matters more than most. During the 2024 election cycle, the exchange emerged as one of the crypto industry’s most aggressive political spenders, backing candidates seen as friendly to digital assets. Its support has been widely viewed as a bellwether for broader industry acceptance – and without it, senators are wary of advancing legislation that could face backlash from the sector it aims to regulate.
Tensions rise inside the White House
Sources close to the discussions say the administration was caught off guard by Coinbase’s public reversal and viewed it as a breach of trust. Internally, the move has been described as an attempt to dictate terms rather than negotiate them.
The frustration has taken on a sharper political edge. Officials have reportedly pushed back against the idea that any single company can speak for the entire crypto industry, emphasizing that the framework reflects priorities set by Donald Trump and his administration, not by corporate executives.
A bill caught between banks and crypto
At the heart of the impasse lies a familiar conflict: stablecoins. The White House is said to favor a structure that aligns with major banks and traditional financial institutions, while Coinbase argues that such compromises come at the expense of innovation and competition.
For now, the bill sits in limbo. With industry unity fractured and political backing no longer guaranteed, the path forward for comprehensive US crypto regulation looks far less certain than it did just weeks ago.
