Coinbase (NASDAQ:COIN) CEO Brian Armstrong publicly backed passing the Clarity Act on April 10 after killing the bill in January, as a new compromise allows activity-based stablecoin rewards while banning passive yield.
The January Blowup
In January, Armstrong posted publicly on X the night before the Senate Banking Committee’s scheduled markup, announcing that Coinbase could not support the bill in its current form.
That move single-handedly caused the hearing to be postponed and fractured the crypto industry.
The move drew public disagreement from prominent leaders, including a16z crypto’s Chris Dixon, who posted that now was the time to move the bill forward.
The Compromise That Changed Things
Over the following months, Senators Thom Tillis (R-SC) and Angela Alsobrooks (D-MY) negotiated a compromise. By late March, the two reportedly came to a tentative deal on stablecoin yield.
Then on April 8, the White House Council of Economic Advisers released a report finding that a full ban on passive yield would cost consumers $800 million in lost returns annually while providing only negligible benefit to bank deposit stability.
This undercut the banking industry’s primary objection.
The framework bans passive yield on holding stablecoins but allows activity-based rewards like transaction rebates and loyalty programs.
Why Armstrong Flipped
Armstrong’s April 10 reversal came after this compromise successfully addressed industry concerns.
By allowing activity-based carve-outs, the updated language protects enough of Coinbase’s revenue engine for the exchange to finally drop its opposition.
Several other factors converged. Coinbase received conditional approval from the OCC to charter Coinbase National Trust Company on April 2, a significant regulatory milestone that gives the company a federally regulated path regardless of what happens with the Clarity Act.
“We agree. Thank you Treasury Secretary Scott Bessent for saying it. It’s time to pass the Clarity Act,” Armstrong wrote.
“Grateful for all the bipartisan work among Senators and staff over the past several months to make this a strong bill,” he added.
The Treasury Push
Armstrong’s endorsement followed a coordinated pressure campaign.
In a Wall Street Journal op-ed, Treasury Secretary Bessent called the legislation critical, warning that crypto development had relocated to Abu Dhabi and Singapore.
SEC Chair Paul Atkins backed the push, saying the legislation would strip “rogue regulators” from the system.
The Ticking Clock
The Senate returns April 13. Senator Bill Hagerty said proponents could move it through the Banking Committee and out to the full Senate before month’s end.
The bill must clear the Banking Committee, merge with the Agriculture Committee version, pass a full Senate vote, reconcile with the House version, and get signed by the President.
If Republicans lose the Senate in November midterms, the Clarity Act’s dynamics change entirely. Any floor vote must happen before August when campaigning begins.
Image: Shutterstock
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