White House may withdraw support for crypto bill after Coinbase halts yield talks
The White House is considering withdrawing support for a proposed crypto market-structure bill after Coinbase walked away from negotiations over a yield agreement banks required. Officials told reporters they view Coinbase’s abrupt exit as a “rug pull” that undermined a deal the administration had backed. Coinbase CEO Brian Armstrong said the exchange cannot support the Senate Banking Committee’s draft, citing an effective ban on tokenized equities and broad restrictions on DeFi. The standoff occurred just before a key committee markup. The White House stressed that one firm should not represent the industry and signalled it may abandon the bill unless Coinbase returns with terms acceptable to banks. Traders should expect increased regulatory uncertainty and potential volatility for major exchanges and liquid crypto assets while the legislative outlook remains unresolved.
Bearish
This standoff increases near-term regulatory uncertainty for the crypto sector and specifically for major exchanges. Coinbase’s public rejection of the Senate Banking Committee draft — and the White House’s threat to withdraw support for the bill — make legislative outcomes less predictable. For traders, that typically raises risk premia, can reduce institutional confidence, and may prompt sell-side positioning or wider bid-ask spreads on exchange-traded tokens. Short term: likely heightened volatility and downside pressure for large exchange-related tokens and broad-market risk assets. Medium-to-long term: outcome depends on whether a revised agreement is reached; if negotiations resume and yield/banking concerns are resolved, regulatory clarity could be restored, which would be stabilizing. Until then, the news is a bearish catalyst driven by policy uncertainty.