As the crypto community eagerly anticipates a breakthrough in U.S. regulation, a sudden cold shower has arrived — the U.S. Senate Banking Committee has abruptly canceled the scheduled review of the cryptocurrency market structure bill set for tomorrow. The trigger? Industry giant Coinbase has suddenly 'backed down': officially withdrawing its support for the bill, stating the current draft is 'worse than the status quo.' This seemingly hasty policy halt conceals a fierce clash of interests worth $6.6 trillion between the crypto industry and traditional banking, revealing the fatal flaw of ongoing internal conflicts in U.S. crypto regulation. The global crypto market now stands at a crossroads between 'regulatory vacuum' and 'innovation breakthrough.'
Who would have thought that Coinbase, once a staunch supporter of this bill, would suddenly "flip the table" right before the review? CEO Brian Armstrong openly outlined three core contradictions in his statement: the bill secretly contains a de facto ban on tokenized stocks, imposes anti-money laundering obligations indiscriminately on DeFi developers, and prohibits non-bank institutions from offering stablecoin yield services—each one directly targeting Coinbase's lifeline. Especially the stablecoin yield service, which is a core revenue pillar, contributed $247 million in Q4 2025, accounting for 18% of total revenue. If the bill passes, it would be equivalent to cutting off a major cash cow. This is far more than a mere policy disagreement—it is a decisive resistance by the crypto industry against a bill that would stifle innovation.
The essence of this "reversal" is a $6.6 trillion battle of interests between traditional banking and the crypto industry. Banks have long eyed stablecoin yield services: according to U.S. Treasury data, if stablecoins were allowed to offer yield products freely, they could siphon up to $6.6 trillion from the traditional banking system, directly undermining the foundation of deposit businesses. Therefore, banks have lobbied Congress to include clauses in the bill that "ban non-bank institutions from offering stablecoin yields," essentially using regulatory power to crush competitors. Coinbase's withdrawal of support has exposed the true face of this "regulatory protectionism"—when the bill becomes a shield for traditional industries rather than a tool to balance innovation and risk, the resistance from industry giants becomes inevitable.
Even more alarming is how the U.S. crypto regulatory "internal struggle" is causing it to lose global influence. While the U.S. Congress is locked in debate over the bill and the regulatory framework remains unestablished, the EU's MiCA regulation has already fully taken effect by the end of 2024, attracting numerous crypto firms with its clear classification-based regulation; Dubai, Singapore, and other regions have also introduced favorable policies, becoming safe havens for crypto capital. The recent suspension of the U.S. bill once again exposes the deep-rooted flaws in its regulatory system: the jurisdictional conflict between the SEC and CFTC remains unresolved, and Congress is still influenced by special interest groups, resulting in regulatory policies either being overly restrictive or becoming victims of industry lobbying. TD Cowen analysts直言 that Coinbase's reversal means the bill is "likely beyond repair through negotiation," and the legislative framework for the U.S. crypto market may be permanently shelved.
Coinbase's "reversal" may seem sudden, but it was foreshadowed. On January 12, reports surfaced that if the bill restricted stablecoin yield services, Coinbase would reconsider its support. As the review approached, the bill's excessive constraints on DeFi and de facto ban on tokenized stocks made the industry realize this was not a "clarifying bill," but a "castrated regulation." After all, tokenized stocks, DeFi innovation, and stablecoin yields are the three most dynamic sectors in today's crypto industry. If these are crushed by the bill, the U.S. crypto ecosystem will lose its global competitiveness entirely. Armstrong's statement was spot on: "Rather than support a bill that makes the industry worse, it's better to hold firm and push for a truly reasonable regulatory framework."
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The impact of this regulatory drama on the market has already begun to show: after the announcement, Bitcoin dropped 2.3% in a short period, briefly falling below $61,000; Coinbase stock rose逆势 by 1.7%, with the market voting with its feet to endorse its "reversal" decision; meanwhile, tokens like XRP and Solana, which previously anticipated regulatory clarity, showed signs of capital outflows. In the short term, the bill's suspension will heighten uncertainty in the crypto market, potentially driving funds toward the clearly regulated EU market. But in the long run, this might be a turning point of "retreat to advance"—when the industry stops compromising with unreasonable regulations, and Congress realizes that "crushing innovation won't win the competition," only then can truly balanced regulation emerge.
In my view, Coinbase's reversal is a "just act" for the crypto industry. The core of crypto regulation should be "protecting investors and encouraging innovation," not becoming a moat for traditional industries. The U.S. banking sector's attempt to ban stablecoin yields through legislation is essentially using administrative means to protect monopolistic interests, violating the basic logic of market competition. In contrast, the EU's MiCA regulation clearly defines regulatory boundaries for stablecoins and crypto assets while preserving space for innovation—this is the proper stance for regulation. If the U.S. continues to be trapped in the internal struggle of interest groups, it will ultimately lose its pricing power and leadership in the global crypto market.
More worrying is the chaos in U.S. crypto regulation is triggering "regulatory arbitrage." An increasing number of crypto firms are shifting their operations to regions with clearer regulations, such as the EU and Asia, while Coinbase itself is accelerating its global expansion. As innovative forces in the U.S. continue to drain away and institutional capital hesitates to enter due to regulatory uncertainty, the once-leading crypto pioneer may fall behind entirely in this internal regulatory struggle.
This farce of the bill's suspension has delivered a harsh lesson to all crypto practitioners and investors: genuine regulatory progress is never gained through compromise—it is won by standing firm and fighting for it. Coinbase's reversal sets an important precedent for the crypto industry—when faced with unreasonable regulation, giants should not remain silent, but step forward to push rules toward greater fairness and reasonableness.
Can U.S. crypto regulation break free from this internal quagmire? Is Coinbase's reversal a sign of industry awakening—or will it provoke even stronger regulatory retaliation? Share your predictions in the comments and witness this battle for global crypto dominance unfold.