The bill on the structure of the crypto market in the U.S., also known as the CLARITY Act, is highlighting the growing divide within the crypto industry. While Coinbase has withdrawn its support after the latest amendments from the Senate, Ripple has publicly sided with this bill and urged lawmakers to continue pushing it forward.
This difference shows the same legal framework, but it can create different winners and losers, depending on the business model and strategic direction of each company.
What is the CLARITY Act trying to accomplish?
The CLARITY Act aims to address the ongoing regulatory controversy over the crypto market in the US: who will oversee the crypto market.
The core of the bill is to clarify the boundaries between the SEC and CFTC.
This decision directly affects how tokens are traded, how exchanges operate, the structure of stablecoins, as well as the role of DeFi in US law.
Why have the Senate amendments changed the political landscape?
The US House of Representatives has passed an earlier version of the bill that many crypto companies once supported. However, the Senate Banking Committee later rewrote the entire content rather than just making minor adjustments.
The draft from the Senate expands the power of the SEC, requiring additional disclosure about tokens, limiting benefits for stablecoins, and tightening some DeFi activities in a way that resembles banking control.
These changes force large crypto companies to rethink their dynamics and competitive advantages.
Why does Coinbase oppose the Senate version?
Coinbase believes that the Senate's amendments have crossed many red lines. The company states that the new draft weakens the role of the CFTC, increases decision-making power for the SEC, and creates uncertainty about the listing of tokens.
Notably, Coinbase opposes limiting benefits from stablecoins. Income from stablecoins is an important part of Coinbase's customer service model and is a competitive weapon against traditional banks.
Coinbase also warns that regulations related to tokenized equity and DeFi could stifle innovation and increase legal risks for large-scale operational platforms.
Why does Ripple still support this bill?
Ripple's perspective is based on a very different business model. Over the past year, Ripple has focused heavily on infrastructure for institutions, controlled payment solutions, and expanding in a way that prioritizes legal compliance.
For Ripple, legal transparency—no matter how strict—is still better than ambiguity. A clear regulatory framework will help banks, payment companies, and organizations collaborate more easily with XRP, RippleNet, and Ripple's RLUSD stablecoin.
Stablecoin regulation benefits Ripple more than Coinbase.
The Senate draft views stablecoins primarily as a payment tool, not as a profit-generating product for users. This approach aligns perfectly with Ripple's development strategy for RLUSD, which focuses on serving payments and settlements rather than benefiting retail investors.
For Coinbase, these regulations diminish differentiation and push advantages back to banks. For Ripple, it turns stablecoins into regulated financial infrastructure and increases barriers for competitors that focus solely on retail investors.
DeFi and compliance create legal barriers.
The notes from the Senate also increase compliance demands on DeFi and on-chain activities. This will raise legal costs and complexity for companies associated with open DeFi and trading for retail investors.
Ripple is not significantly affected by DeFi. With a focus on building business relationships, stricter regulations actually help Ripple reduce competition and gain an advantage over competitors who are already accustomed to operating within legal frameworks.
The question between the SEC and CFTC is no longer very important for Ripple.
Coinbase has long proposed a model regulated by the CFTC, thereby reducing risks related to securities laws when trading and listing tokens. Meanwhile, Ripple—after years of litigation with the SEC—prioritizes stability, clarity over who is in charge of oversight.
Simply put, transparent and stable regulation, Ripple still operates well within the legal framework influenced by the SEC. But Coinbase, which lists and supports many different types of tokens, will face more risks if the SEC gains more control.
The debate over the CLARITY Act is now not just a crypto fight with regulators. It is becoming increasingly clear that crypto businesses are also facing off against each other, each supporting the type of regulation that best aligns with their own economic interests.
Whether the bill is passed or not, this division shows that the crypto industry is entering a new phase—and that 'legal clarity' does not always mean the same thing for everyone.
