TL;DR

• Coinbase CEO Brian Armstrong pulled support for the Senate's CLARITY Act crypto bill just before a key vote.

• Main issues: bans on stablecoin rewards for holders and tokenized stocks - hits users hard and lets banks dodge competition.

• Markup delayed, industry divided, but fixes are in talks. No bill beats a bad one, he says.

Stablecoin rewards top the hit list. The draft stops platforms from paying yield on coins just sitting in wallets - think 5% returns on USDC without lifting a finger. Banks can still offer interest on deposits, though. Armstrong calls it banks banning competition.And it's not just that. A de facto ban on tokenized equities kills Coinbase's plans to trade on-chain stocks next year. DeFi rules could hand government eyes on your wallet history - worst expansion since Patriot Act days and it tilts power to the SEC over CFTC.​
Coinbase reviewed the 270-page monster dropped Monday night.

 By Wednesday, they bailed publicly. 

 Armstrong posted on X "We'd rather have no bill than a bad bill. Harsh, but the stakes hit their product lines hard.​

Banks vs Crypto Clash

Wall Street lobbied hard here. They fear stablecoin yields pulling deposits - folks ditching 0.5% savings accounts for crypto's better rates.Crypto doesn't do fractional reserve lending like banks, so less systemic risk, Armstrong argues.​Over 52 million Americans touch crypto daily. If this bill passes as is, it shields banks from real rivalry. Consumers lose choice  and yields that beat inflation.​Stablecoins hold $150 billion plus. Rewards draw users in, building habits. Strip them, and you hand banks a moat while claiming consumer protection.​ source

Industry Splits Open

Not everyone's with Armstrong. Ripple's Brad Garlinghouse stays optimistic, pushing markup fixes. Kraken and Digital Chamber back advancing it .​Coinbase's move smells like leverage. High-stakes poker to force better terms. But TD Cowen analysts see it derailing the whole thing this session.​Bitcoin hit $97k amid the noise  markets shrug off D.C. drama. On-chain shows whales stacking up.

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What Fixes Look Like

Compromises float around. Rewards okay for active use , transact, stake, liquidity provide. Idle coins means No yield. Aligns with some Dem proposals.​Tokenized assets might get carve out if tied to real regs. DeFi surveillance dialed back. But banks dig in on stablecoins.​With Trump in office since '25, crypto push has GOP muscle. Congress wants a win. Realistic shot at revised bill by spring, if egos bend.​Armstrong bets on re-engagement. "Catastrophic" for users otherwise, he told CNBC. Crypto needs rules - just not ones rigged for incumbents.​
This snag shows how fragile these deals are. Banks guard turf, crypto fights for air, lawmakers juggle it all. Users areStuck waiting.​

Closing Statement

Armstrong's stand spotlights a raw truth - good rules lift everyone, bad ones pick winners. Push for that better draft. Crypto's too big now for half baked laws