Crypto Bill Stalls: Can the CLARITY Act Regain Momentum Without Coinbase?

The CLARITY Act, once seen as a potential breakthrough for cryptocurrency regulation, currently finds itself in legislative limbo. It lost momentum in January after Coinbase pulled its support, citing apprehensions about legal protections and stablecoin yields. This withdrawal raises a significant question: can the crypto industry push for meaningful legislation without the backing of prominent exchanges like Coinbase?

The Evidence: A Missing Giant

Coinbase's influence in the crypto world is undeniable. As one of the largest cryptocurrency exchanges, its support is often seen as a bellwether for broader industry sentiment. So, when it withdrew from the CLARITY Act in January 2025, it wasn't just a minor setback. The move sent ripples through the legislative process, halting progress on a bill introduced in July 2025 that aimed to add much-needed regulatory clarity.

Coinbase's concerns centered around two key areas: legal protections and the mechanism for stablecoin yields. The lack of clear legal safeguards for exchanges and investors remains a sticking point. Moreover, the way stablecoin yields are defined and regulated could impact profitability, making some firms hesitant to support the current form of the bill. In traditional markets, this would be called a credit spread issue.

Counterpoint: What's the Hold-Up?

But is Coinbase's absence truly crippling the bill's prospects? Not everyone thinks so. Some argue that the legislative process is inherently slow and that the crypto sector is notorious for its rapid pace and evolving nature. It's possible that other players in the crypto space could step in to fill the void left by Coinbase, potentially offering different perspectives that could enrich the legislative process.

The comparable in TradFi is when big banks step back from certain regulations, allowing smaller, more agile firms to influence policy. This could lead to fresh approaches that major players might overlook. So, could this slowdown actually provide a window for creative, niche solutions to emerge?

The Verdict: Navigating Forward

Here's the thing: navigating the regulatory space of crypto is no easy task. While Coinbase's withdrawal highlights legitimate concerns, it also signals the need for a more cohesive industry approach to legislation. The absence of one major player doesn't mean the end of progress. Instead, it presents an opportunity for other stakeholders to rally around and push the bill forward.

Ultimately, the success of the CLARITY Act depends on the collective will of the crypto community to engage with lawmakers and address the underlying issues. In traditional markets, this would be seen as a chance to reprice risk and reevaluate strategies. The Sharpe ratio tells a sobering story, risk-adjusted returns are everything, and the crypto market needs to align its incentives for the long term.

Will other entities step up to the plate and drive the conversation? Or will the bill languish without the powerhouse backing of Coinbase? The crypto industry should use this moment to recalibrate and push for a framework that satisfies both regulatory demands and market realities.