Crypto policy leaders have scrambled Thursday to voice their commitment to the bill and mitigate what some see as the damage done to its chances of passage by Coinbase’s abrupt about-face.
“They’re on an island here,” one crypto policy insider told Decrypt, speaking of Coinbase.
“Inaction is unacceptable,” Cody Carbone, CEO of crypto nonprofit The Digital Chamber, said in a statement Thursday. “We cannot afford to walk away from the table at a moment when clarity is within reach.”
If Coinbase is on an island, though, it is quite a powerful one. The company, one of the crypto industry’s most formidable forces in Washington, managed to singlehandedly force the Senate Banking Committee to punt a vote that both GOP leadership and the White House backed.
Coinbase’s last-minute decision to protest the bill likely centered on an ongoing battle between crypto companies and the banking lobby over stablecoin yield—one Coinbase appears to have felt it was starting to lose.
But by Wednesday, it looked likely that bipartisan amendments to the bill supported by the banking lobby—which would have made stablecoin yield language more restrictive—were going to pass at Thursday’s markup, sources familiar with the matter told Decrypt.
“Coinbase had a red line and made a judgement call,” one top crypto lobbyist told Decrypt.
“Members of Congress don’t like getting played and don’t like having their time wasted,” one D.C. insider told Decrypt. “Maybe [Armstrong] gets one more chance, but he burned an enormous amount of capital and credibility.”
But even the backers of that initiative appear to be splintering over Coinbase’s approach to the market structure bill. Fairshake, the industry’s top super PAC, is funded principally by Coinbase, Andreessen Horowitz, and Ripple.
And earlier today, speaking at a swanky investor summit in St. Moritz, Switzerland, Ripple CEO Brad Garlinghouse signaled his lack of prior warning about Coinbase’s moves against the bill.
The next step for the market structure bill would likely be a scheduled markup of the bill in the Senate Agriculture Committee, which is dealing with the portion of the legislation under the CFTC’s purview.
But the Senate Banking Committee, which oversees the SEC, has generally been leading the push for the legislation—and Capitol Hill sources told Decrypt they would not be surprised if the Agriculture markup, penciled for January 27, is also delayed, as Senate Banking determines what to do next.
One crypto policy leader, who was already skeptical of the bill’s chances prior to Coinbase’s surprise move, doesn’t see how the play makes passage any more likely.
“I still don’t know what the path forward is,” they told Decrypt.
