The industry’s unified front has fractured.
Two weeks ago, the Digital Asset Market CLARITY Act (H.R. 3633) looked like a done deal. Today, the bill is fighting for survival after Coinbase (COIN) formally withdrew its support, citing “existential risks” to DeFi innovation and stablecoin yield models. The reversal sent shockwaves through Washington and Wall Street alike, leaving the Senate Agriculture Committee scrambling ahead of its rescheduled markup session this Tuesday, January 27.
Markets reacted immediately. COIN shares slid 2.77% to $216.95 in early trading, continuing a downward drift from last week’s highs. Volume remains thin as institutional desks wait to see if the Senate Ag Committee can salvage the bill without its largest industry backer.
The Poison Pill: Yield
The friction point isn’t jurisdiction. It’s yield. While H.R. 3633 successfully delineates the SEC/CFTC split for assets like Bitcoin and Ethereum, recent revisions introduced strict controls on “reward-bearing stablecoins.”
Congressional filings indicate the updated language treats stablecoin yield, a core revenue driver for exchanges, as synonymous with uninsured bank deposits. For Coinbase, which reported record revenue from stablecoin interest in Q4 2025, this is a non-starter. The exchange’s lobbyists argued in a January 15 memo that the provision effectively hands the stablecoin market to traditional banks.
“We cannot support legislation that disguises a banking monopoly as consumer protection,” the memo read. “DeFi protocols cannot comply with bank-style capital requirements. This bill, in its current form, bans software.”
Legislative Whiplash
The timing is brutal. The bill already cleared the House in July 2025 with bipartisan support (passing 245-180). It was intended to pair with the GENIUS Act, which standardized stablecoin issuance last summer. Instead, the Senate Banking Committee was forced to postpone its initial markup earlier this month following the industry split.
Now, all eyes turn to the Senate Agriculture Committee. Chairwoman Stabenow has refused to delay the January 27 session, signaling an intent to push the CFTC-focused portions of the bill forward regardless of the banking disputes. If the committee advances the bill Tuesday, it forces a floor vote where the crypto lobby will be fighting itself.
NASAA, representing state securities regulators, added fuel to the fire this week, sending a letter to Senate leadership warning that Title I of the act preempts state-level fraud enforcement. The combined pressure from state regulators and the largest U.S. exchange creates a pincer movement that could stall the bill until after the 2026 midterms.
