Mirror Review
January 19, 2026
U.S. cryptocurrency regulation took an unexpected turn this week when Coinbase CEO Brian Armstrong withdrew the company’s support for the Digital Asset Market Clarity Act just hours before a scheduled Senate committee vote
The move led lawmakers to pause work on the bill and reopened basic questions about how cryptocurrencies should be regulated, which government agency should be in charge, and whether passing an imperfect law is better than having no clear rules at all.
While some critics see the Coinbase CEO crypto bill withdrawal as disruptive, supporters believe it gives lawmakers time to fix serious issues in the bill and avoid putting rules in place that could slow innovation in the U.S. crypto industry for years to come.
What Is the Digital Asset Market Clarity Act?
The Digital Asset Market Clarity Act was announced earlier this year as a major effort by U.S. senators to create clear rules for cryptocurrencies. It was introduced to address the growing uncertainty around digital assets, including how they are classified, regulated, and traded. The goal is to provide a consistent framework for investors, companies, and regulators, and to prevent conflicts between agencies like the SEC and CFTC.
What Happened During the Senate Crypto Bill Debate?
Coinbase CEO Brian Armstrong posted on X that the company “can’t support the bill as written” and would “rather have no bill than a bad bill,” referring to the Senate’s Digital Asset Market Clarity Act.
After Armstrong’s statement, the Senate Banking Committee postponed its scheduled markup, freezing progress on what was expected to be the most comprehensive crypto regulation in U.S. history.
According to Reuters, Armstrong’s concerns made senators worry the bill might not get enough votes to pass the committee, prompting the delay.
Armstrong later emphasized that talks with lawmakers and the White House remain “constructive,” suggesting the withdrawal was meant to improve the bill, not stop regulation entirely.
Why Coinbase Withdrew Support
Coinbase and its executives raised concerns about several parts of the Senate bill that they believe could slow the long-term growth of the U.S. crypto ecosystem.
1. Stablecoin Rewards at Risk
According to The New York Times, banking lobbyists pushed language that would stop crypto platforms from paying interest or rewards on stablecoins. Stablecoin rewards are an important way Coinbase earns revenue and a key feature for users. Coinbase says such restrictions would protect traditional banks from competition rather than help consumers.
2. Threat to Tokenized Assets
Some parts of the bill could effectively ban tokenized securities and real-world assets on public blockchains. This area is widely seen as the next major growth frontier for crypto.
3. DeFi Compliance Burdens
The bill adds stricter rules for decentralized finance (DeFi) platforms. Critics warn this could harm privacy and decentralization, which are central to blockchain technology.
4. Regulatory Power Shift
Armstrong also said the bill gives more authority to the Securities and Exchange Commission (SEC), weakening the Commodity Futures Trading Commission (CFTC), which many in the crypto industry see as the more suitable regulator for digital commodities.
Industry Reaction: A House Divided
While Coinbase took a hard line, much of the crypto industry disagreed with the timing.
The Verge reported that several prominent leaders, including Kraken CEO Arjun Sethi, Ripple CEO Brad Garlinghouse, and a16z’s Chris Dixon, publicly criticized Coinbase’s move, arguing that imperfect legislation is better than prolonged regulatory uncertainty.
“Reasonable people can disagree on specific provisions,” Kraken CEO Arjun Sethi said, adding that abandoning years of bipartisan progress could set the industry back.
On the other hand, policy experts see the Coinbase CEO Crypto Bill withdrawal as a calculated long-term play.
“Coinbase has played its hand very well,” Todd Phillips, a finance expert at Georgia State University, told The New York Times, highlighting the firm’s growing influence in the US.
Pros and Cons of the Coinbase CEO Crypto Bill Withdrawal
- Potential Upside
- Prevents rushed legislation that could lock harmful rules into law
- Protects innovation in DeFi, stablecoins, and tokenized assets
- Forces deeper debate over SEC vs. CFTC oversight
- Signals that crypto firms now wield real political influence
- Key Risks
- Delays long-awaited regulatory clarity in the U.S.
- Creates short-term market volatility
- Exposes deep divisions within the crypto industry
- Risks political backlash ahead of election season
What Happens Next?
According to Reuters, lawmakers are expected to revise contentious sections and attempt to reintroduce the bill later this month or in early 2026.
However, with election campaigns approaching, the window for bipartisan agreement is narrowing fast.
If negotiations delay, the U.S. could fall further behind regions with clearer crypto frameworks, such as the EU and parts of Asia, potentially reshaping global crypto leadership.
End Note
By pulling support at the last moment, Coinbase’s CEO paused a major U.S. crypto bill that could have shaped the industry for years.
While the delay has created uncertainty, it also gives lawmakers a chance to fix parts of the bill that may have limited innovation.
What happens next will decide whether the U.S. creates clear, fair crypto rules or continues to lag behind other global markets.
Maria Isabel Rodrigues
