A crucial vote in the United States Senate Banking Committee regarding the Digital Asset Market Clarity Act, or CLARITY Act, has been deferred due to withdrawals by Coinbase CEO Brian Armstrong, which led to threats by the Biden administration of revoking their support due to differences with regard to stablecoin interest rates and regulatory powers.
Bill’s Fate Hangs in Balance
The CLARITY Act, introduced in May 2025 and passing through the House in July, aimed to make two key changes: divide oversight between the Securities and Exchange Commission and Commodity Futures Trading Commission, define what constitutes a digital asset, and set compliance standards for exchanges and issuers.
Supporters say it would eliminate regulatory uncertainty and could accelerate institutional adoption and innovation.
The setback reflects cracks in bipartisan negotiations that have put forward a bill that crypto markets are closely watching and testing U.S. competitiveness in digital assets.
The White House, though supportive according to its July 2025 statement, is also weighing withdrawal unless Coinbase returns to talks with a yield agreement that works for banks.
According to a source close to the Trump administration, the move by Coinbase was essentially a “rug pull” on officials focused on consumer protection and financial stability.
Coinbase’s objection is to provisions that Armstrong says would hamstring CFTC authority, ban tokenized equities, constrain decentralized finance and kill stablecoin rewards, letting banks suppress competition.
“This version would be materially worse than the current status quo,” Armstrong posted on X on January 14, 2026.
There is division in the crypto space. While Coinbase is receiving criticism for its position, with entities such as Citron Research claiming Armstrong is sabotaging the bill, there are some, such as Ripple and Kraken, who are showing support.
The Blockchain Association believes banks are carrying out a “relentless pressure campaign.”
Banking associations believe that the yields on stablecoins result in unfair competition, which can lead to a drain on deposits and loans.
The American Bankers Association called for regulations, as loopholes remained in the GENIUS Act, according to them.
The Democrats, led by Sen. Elizabeth Warren, oppose this legislation as it lessens investor protections and neglects issues of conflicts of interest within the White House.
Sen. Ruben Gallego said he had reservations about the legislation after he missed a meeting with White House crypto adviser Patrick Witt.
The stall was causing market fluctuations. Bitcoin was stuck around the value of $95,000.
Analysts pointed out frustration due to the fact that the community was expecting some sort of advancement in 2026.
Industry Warns of Exodus
Lobby groups, including the Blockchain Association, argue thatinnieasing the bill simply cements the idea that the US is hostile and accelerates innovation migration to Europe and the Asian continent. “It could upend months of bipartisan progress,” a lobbyist said.
The counterarguments presented by consumer advocacy groups, which number more than 80 and signed a letter in July 2025, argue the bill favors industry more than protection.
Banking Committee chair Sen. Tim Scott expresses optimism about the situation, saying the White House is still committed to allowing its passage.
“This delay allows resolution of differences,” White House Crypto Czar David Sacks wrote on the social media site X.
Next Steps for Crypto Policy
Negotiations are being conducted, and the Senate Democrats are holding industry calls on January 17.
A Senate Agriculture Committee mark-up is scheduled for January 27. Proposed changes deal with stronger disclosure and enforcement authority.
The bill may be relegated if unresolved.
The White House calls for an agreement soon, which indicates a passing of legislation is likely if an agreement is reached.
