People should be concerned about a certain type of silence in Washington. Not the stillness of impasse, when both sides are yelling at one another and nothing is happening. The other type occurs when a bill that everyone said they supported quietly loses its most influential supporter, and the officials who could make the necessary changes remain silent. The CLARITY Act currently finds itself in that situation.
During what Capitol Hill insiders referred to as “crypto week,” the Digital Asset Market Clarity Act was passed by the House last July. It was a period of legislative activity that briefly gave the impression that the industry had finally earned a seat at the table. After years of stalled proposals and enforcement-by-lawsuit, the GENIUS Act, which focuses on stablecoin regulation, was signed into law on July 18, 2025, marking a significant accomplishment. Next was supposed to be the CLARITY Act.
| Field | Details |
|---|---|
| Legislation | Digital Asset Market Clarity Act of 2025 (CLARITY Act) |
| Passed by | U.S. House of Representatives (July 2025, during “crypto week”) |
| Current status | Senate Banking Committee markup session cancelled January 14, 2026 — no rescheduled date announced |
| Primary purpose | Establish statutory division of authority between the SEC and CFTC over digital assets; create clear token classification framework |
| Key figure — opposition | Brian Armstrong, CEO of Coinbase (NASDAQ: COIN) — withdrew support January 14, 2026 |
| Armstrong’s concern | New CLARITY language banning stablecoin issuers from offering yield/interest to token holders, which directly affects Coinbase revenue |
| White House position | Reportedly “furious” at Coinbase’s unilateral action; may withdraw support if yield deal not reached with banks |
| AI & Crypto Czar | David Sacks — stated White House “remains committed” but offered no direct response to reports of withdrawal threat |
| Senate Judiciary concern | Senators Grassley & Durbin warned that CLARITY’s DeFi exemptions infringe on Judiciary jurisdiction and create enforcement gaps |
| Related legislation | GENIUS Act — signed into law July 18, 2025; regulates stablecoins |
| Industry supporters | Andreessen Horowitz, Paradigm, Coin Center, Digital Chamber — all urged committee to proceed with markup despite Coinbase |
| Goldman Sachs view | CEO David Solomon said there is “a long way to go before that bill is gonna progress” |
It was intended to give cryptocurrency developers a clear legal path to operate in, end the ten-year turf war between the SEC and the CFTC, and send a message to the world that America would no longer continue to regulate this sector through courtroom ambushes. Then there was a tweet from Brian Armstrong.
The CEO of Coinbase stated on January 14, 2026, that he would “rather have no bill than a bad bill,” which might sound moral if the issue weren’t so blatantly self-serving. The new CLARITY language that would prohibit stablecoin issuers from providing yield or interest to token holders is Armstrong’s primary objection, which he has been most explicit about. Offering “rewards” to users who park stablecoins on the platform accounts for a sizeable portion of Coinbase’s earnings.
Banks had vigorously advocated for this limitation, claiming that yield-bearing stablecoins could cause a banking system run and operate similarly to uninsured deposit accounts. Armstrong presented this as an assault on the entitlement of regular users to receive compensation. Critics had a different opinion.
In the words of one social media observer, the arrangement Armstrong was arguing that decentralization is just the same banking model under a different name. The same user clarified that the fight was never about preventing people from earning yield, but rather about preventing Coinbase from being the middleman collecting it, after Armstrong claimed not to follow that argument. It’s important to consider that distinction.
What followed was almost comical. Senate Democrats and cryptocurrency stakeholders hurriedly set up a call to determine a new cooperative course of action. Depending on which participant you trusted, reports from that call ranged from “productive” to “group therapy session where no real progress was made.” Tim Scott, the chair of the Senate Banking Committee, postponed the January 15 markup session.
There isn’t a new date set. Armstrong was tweeting from the World Economic Forum in Davos about his commitment to “market structure legislation,” which is an intriguing setting to show that commitment after just blowing up the bill.
It’s difficult to ignore how rapidly Washington’s mood changed. Journalist Eleanor Terrett’s report that the White House was considering completely withdrawing support for the market structure bill unless Coinbase returned to the table with a yield agreement acceptable to the banks was the most concerning indication.
According to her source, Armstrong’s action was a “rug pull” against the administration and the industry as a whole, and the White House was “furious” about it. Importantly, she was reminded by her source that this is ultimately “President Trump’s bill, not Brian Armstrong’s.”
Armstrong retaliated, denouncing the report as false and maintaining that the White House had been “super constructive.” Terrett maintained her position, pointing out that Armstrong had effectively verified the crucial information: the White House requested that Coinbase reach a yield agreement, and future support seems to depend on that result.
The White House’s AI and Crypto Czar, David Sacks, has not responded directly. He claimed that the administration “remains committed” to passing CLARITY, a claim made by politicians more often to buy time than to show conviction. It’s still unclear if this is a negotiating stance intended to force Coinbase back to the table or if the White House’s patience has truly run out.
In the meantime, the Senate Judiciary Committee determined that this was the appropriate time to make its own assertion. In a letter to the Banking Committee, Senators Grassley and Durbin voiced “serious concerns” regarding the language in CLARITY that exempts non-custodial DeFi developers from money transmitter regulations. They contended that no one consulted the judiciary, which has jurisdiction over that particular section of the criminal code.
They claimed that CLARITY’s DeFi provisions could have “seriously jeopardized” the prosecution of Tornado Cash, a coin-mixing platform whose co-founder was found guilty in August of last year. A few days later, CertiK revealed that some $282 million in stolen Bitcoin was being laundered using Tornado Cash. For those who supported the bill, the timing was unfavorable.
A picture of legislation that might have advanced too quickly for its own structural complexity is beginning to take shape. For more than ten years, Congress, courts, and regulators have been perplexed by the SEC-CFTC jurisdictional issue alone. Companies like Andreessen Horowitz, Paradigm, and Coin Center publicly urged the Banking Committee to proceed even after Coinbase walked.
The CLARITY Act has a legitimate and defendable case because it would replace years of ad hoc enforcement with actual statutory rules. While observing from Wall Street, Goldman Sachs CEO David Solomon made what may have been the most sobering statement: “a long way to go before that bill is gonna progress.”
Most likely, he is correct. The CLARITY Act is still alive, but it needs a champion, and the White House, which ought to be offering one, seems to be considering its options. Losing the administration’s active support at this point would be more than a setback for an industry that has spent years arguing that regulatory clarity is all it needs to prosper. It would confirm the skeptics’ long-held belief that cryptocurrency cannot avoid legislation.
