US President Donald Trump said on Wednesday at the World Economic Forum in Davos that he hopes to sign a law on the structure of the crypto market very soon. However, the law remains blocked in Congress. This highlights a growing gap between the president's goals and the lawmakers' work.
The dispute between Coinbase and banking lobby groups over the revenues from stablecoins threatens to close a rare window for new regulations. Some politicians describe it as a unique moment. There is a risk that a two-year delay may occur. Then the crypto business could move abroad.
Trump on crypto: "Bitcoin, all of them"
"Now Congress is working very hard on a law to structure the crypto market, which I hope to sign very soon. This is how new paths to financial freedom are created," Trump said in his Davos speech.
While reading prepared remarks, the President briefly looked away and added: "Bitcoin, all of them."
This statement came just a few days after the Senate Finance Committee unexpectedly canceled its planned consultation. Trump's words seemed like pressure on the legislator.
Banking Committee postpones decision, Agriculture Committee pushes forward
Two Senate committees are working together on the legislation to structure the crypto market. The Finance Committee is responsible for rules regarding securities, while the Agriculture Committee is responsible for commodities. Both laws must be passed and merged before being presented to the full Senate.
The Finance Committee postponed the consultation last week after Coinbase withdrew its support. This week, the committee focused on Trump's push for affordable housing. The crypto law is now expected to be ready by the end of February or in March.
Meanwhile, the chairman of the Agriculture Committee, John Boozman, introduced the text of the Digital Commodity Intermediaries Act. He confirmed that the consultation is scheduled to take place on January 27. Boozman admitted that talks with Senator Cory Booker have not yielded an agreement.
The central issue: Stablecoin yield
Coinbase opposes parts of the law that relate to yields from stablecoins. The GENIUS Act, signed by Trump last year, allows stablecoin holders to receive rewards – that is, interest. These yields can be higher than normal bank interest rates. As a result, banking lobbyists are calling for restrictions in the new law.
Coinbase CEO Brian Armstrong withdrew his support and said: "We would rather have no law than a bad law." In an interview with Bloomberg in Davos, Armstrong reiterated his view: "The banking associations are trying to ban their competition, and I will not tolerate that. I consider it un-American."
White House counters Coinbase – dispute escalates
The White House reacted sharply. Patrick Witt, head of Trump's Digital Assets Council, publicly criticized Armstrong's stance.
"‘No law is better than a bad law.’ What a privilege to be able to say these words – thanks to Trump's victory and his crypto-friendly administration," Witt said.
He warned that the crypto industry could be making a big mistake by blocking the legislation right now. The consequences could be very negative.
Politicians fear falling behind
In conversations with Fox Business, many politicians expressed their growing frustration over the stalled legislation. Senator Cynthia Lummis (R-WY), a well-known crypto advocate who is retiring next year, expressed disappointment:
"I feel a bit like Flat Stanley after being run over by a truck. I have eleven months left to work on this and make it happen."
Peter Smith, head of the Blockchain Association, warned of major problems:
"If this is not passed now – and it has been worked on for about a year and a half – there will be a long delay after the midterms. Realistically, that means another two years of delay."
Representative William Timmons (R-SC) emphasized the economic significance:
"$10 billion will return to the U.S. if Congress sets good rules. If not, all crypto activities could go abroad."
While politicians are still consulting, the markets are already evolving. The New York Stock Exchange announced plans to launch a crypto platform for securities on the blockchain, with instant settlement and trading around the clock.
Senator Thom Tillis (R-NC) emphasized how important the decision is:
"If we want to remain a global leader in banking, we must also be at the forefront of crypto. There's no way around it."
Crypto law under Trump: What happens next?
The positions are clear. The Trump administration wants quick decisions on the crypto front. Coinbase sees restrictions on stablecoin yields as a red line. The banking lobby demands that these restrictions remain.
The Agriculture Committee's law focuses on the oversight of the CFTC in digital commodity markets. It does not directly address the issue of stablecoin yields. This means that the consultation is likely to take place on January 27. However, for a complete regulatory framework, the Finance Committee must also agree and merge its law with the other.
The resolution of the dispute between Coinbase and the banking lobby over stablecoin yields remains the most important issue. Despite pressure from the White House, Armstrong has shown no signs of backing down so far.
