🤯 Coinbase pulls out of CLARITY Bill

Support collapses just before markup. PLUS: stablecoin rewards divide banks and platforms, Bitcoin rips through shorts, institutional money lines up, and crypto regulation heads back to limbo.

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Cryptopolitan News
January 15, 2026 • Estimated Reading Time: 8 minutes

🏛️ Coinbase pulls out of CLARITY act.

The most hopeful tidbit of U.S. crypto legislation in years has just died, thanks to Coinbase pulling the plug.

Only 48 hours after perusing the U.S. Senate Banking Committee’s draft of the Digital Asset Market Structure Bill, Coinbase CEO Brian Armstrong took to X to renounce his support for it, and then some, referring to its proposal as “even worse than the status quo.”

His post set off a chain reaction that led lawmakers to delay Thursday’s planned markup vote.

❝

It would ban tokenized securities, so lots of smaller companies and any company doing interesting things potentially could no longer use the underlying blockchain in the current bill; somehow undermines DeFi, we’d prefer to not have a bill than to have a bad bill

What really was in the bill?

The draft tried to draw clear lines between crypto securities (SEC) and commodities (CFTC), but the real battle was about stablecoins in particular and how platforms reimburse users.

🧠 Quick explainer:

The 2025 GENIUS Act prohibited stablecoin issuers from having directly paid interest payments, but it left a way out: platforms could still offer rewards.

That gap has been filled by both Coinbase and Circle offering programs that return up to a 5% yield on USDC.

Banks bristled, complaining it threatened their deposit base and produced “shadow banks.’

To address that, the new draft prohibited rewards simply for holding stablecoins (hence passive yield), but still allowed them for use that is “activity-based” — payments, staking or liquidity provision.

But neither side liked it:

Banks said the loophole continues to enable platforms to behave like unregulated lenders. Crypto companies said the bill cripples innovation and provides too much control to the SEC

Why Armstrong walked away

The Coinbase chief executive didn’t just take issue with the stablecoin language. He flagged deeper issues:

  • A de facto ban of tokenized equities: one of Coinbase’s bets for the future.

  • Increased SEC jurisdiction over digital assets, at the expense of the CFTC.

  • Privacy, because the bill calls for massive transaction-level reporting requirements in DeFi.

  • Banking bias terminology that diminishes stablecoin rewards and therefore helps incumbents.

Behind the scenes, Armstrong’s team submitted comments raising a warning against the proposed rules that it feared could develop into “regulatory choke points” and consolidate crypto infrastructure, precisely what many in industry do not want.

More surprising still: Coinbase’s position was repeated by the Blockchain Association, an industry lobbying group, as well as by the Crypto Council for Innovation and several DeFi founders, a rare show of solidarity.

🪙 Cryptopolitan’s take

This was supposed to be crypto’s bipartisan moment. It was an all-out TradFi turf war.

The bill, in turn, sought to walk a tightrope: protect consumers, rein in bad actors but also avoid squishing innovation.

Instead, it pleased no one: Banks complained that it was too weak, and crypto companies said it would act as a Trojan horse for surveillance and capture.

With more than 137 amendments already filed, Thursday’s markup was poised to be messy. If lawmakers postpone the vote now, what they are doing is buying themselves time, not clarity. Unless the bill undergoes substantial revision, it will not move again this session.

What’s clear: Stablecoins are no longer a “payments experiment.” They’re also a front in the struggle over who will dominate the financial system of the future. And we still don’t know on whose rails the U.S. release will run.

🗳️ Your Take:

Did Coinbase do the right thing by pulling support from the crypto bill?

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📊 Market Watch

📈 Huge crypto cash is coming — JPMorgan

According to JPMorgan, institutions are no longer sizing the waters, $130 billion in total flowed into crypto last year, and 2026 could swell even larger.

What’s fueling it? More concrete guidelines, fewer reports on rug pulls, and some long-term bets from asset managers.

It is no longer the wild wild west days.

🤖 TSMC is cashing in on its AI chip business 

Taiwan's chip behemoth just had its biggest quarter ever: 35% profit surge, driven by AI hunger from Nvidia, Apple, and nearly everyone else

77% of their revenue derived from advanced chips (7nm and smaller).

So it seems the AI hype train is still boarding.

🏦  Bitcoin shorts just got wrecked

Over $375M in short positions were liquidated as BTC surged past $96K.

Traders betting against it got steamrolled ,and there’s still $1B more on the line if it keeps climbing.

Add in ETF inflows and Saylor’s new $1.25B buy… and it’s starting to feel like 2021 again.

 đŸ‘€ Are you watching this?

We just released a new report on the 6 crypto trends shaping 2026.

From the rise of prediction markets to how real-world assets are moving on-chain, this short report breaks down what’s actually changing in how crypto is being used, traded, and built.

Got thoughts?

Hit reply and tell us which trend you’re watching most closely.

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