The latest CLARITY Act standoff has now devolved into subtle threats between the White House and Coinbase. In a social media post on the 28th of March, Patrick Witt, the executive director of the President’s Council on Digital Assets, issued a veiled warning that seemed aimed at a recent Coinbase holdout. According to Witt, the future Democratic administration will likely treat stablecoin yield, DeFi, and overall crypto way worse than the current compromise in the CLARITY Act draft. The Trump crypto advisor dared Coinbase to block the bill and find out Democrats’ plans.
This was a complete U-turn from an earlier White House statement that downplayed Coinbase’s alleged opposition to the new stablecoin restrictions. But the stalemate is now public, and the crypto exchange confirmed it. In a separate statement, David Duong, Coinbase’s head of global investment research, said the industry was “working on a coordinated counterproposal” to “preserve sustainable stablecoin rewards.” Some supported Coinbase’s fight for stablecoin yield. But critics wondered when the exchange’s CEO became a “crypto industry CEO” and a de facto spokesperson, decrying that he was holding the entire sector hostage.
However, the contentions on the latest CLARITY Act draft go beyond stablecoin rewards. Industry’s policy chiefs also raised concerns about the draft rules’ treatment of DeFi developer protections and the crypto double taxation issue. Notably, the proposal fixed the double taxation of crypto staking but not Bitcoin mining. This elicited a strong opposition from the advocacy group Bitcoin Policy Institute (BPI).
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