Effort by Leading U.S. Cryptocurrency Firm to Prevent Enactment of Favorable Crypto Legislation
Hitting the Crypto Legislation Jackpot: Coinbase's Take on Stablecoin Bills
Hey there! Let's chat about the latest drama in the crypto world! It seems that Coinbase, along with a few allies, are giving Congress a run for their money in the stablecoin bill debate.
Coinbase and friends are actively lobbying against the passage of stablecoin legislation in a separate bill. This strategic move is causing tension in the cozy crypto policy realm as one such bill inches closer to a Senate vote, according to sources familiar with the matter.
But Coinbase says it's all about strategy, not obstruction. A spokesperson claimed the company fully supports the bill as is, with any perceived roadblocks simply stemming from differing political views.
"Coinbase is America's crypto ambassador, forever pushing for cryptocurrency legislation," said Coinbase VP of US Policy Kara Calvert.
Stablecoin bills currently being considered by Congress would pave the way for legality for stablecoin issuers. These digital assets, pegged to the US dollar, serve as a critical link between crypto and traditional financial markets.
Legislating stablecoins has been a top priority for the crypto community for months, and both Senate and House versions of the bills have already passed key committee votes. The Senate is eager to lead the charge, with plans to bring the GENIUS Act to the floor for a vote in the next two weeks, sources reported.
Once stablecoin bills pass in both chambers, they'll head to President Trump's desk for signing. Trump has previously expressed his desire to sign the laws without delay.
However, behind closed doors, Coinbase is allegedly making moves to prevent individual stablecoin bills from reaching the floor. Silicon Valley venture giant Andreessen Horowitz is reportedly aiding Coinbase in this endeavor.
But why would the leading crypto company discourage positive crypto-focused legislation? The rift has nothing to do with the bill contents, sources say, but everything to do with political gameplay.
At present, Congress is mulling over two significant crypto bills: a stablecoin bill, and a market structure bill known as "FIT21." Congressional leaders are intending to pass the stablecoin bills first, with market structure legislation to follow shortly, aiming for both bills to be signed into law by August.
Coinbase, which really needs the market structure legislation passed to validate its business model, has started to sweat when considering if there'll be enough political goodwill for two crypto-related votes. Now, the company wants both bills merged into a single mammoth crypto bill and rushed to the Senate and House floors as quickly as possible.
"If we just focus on stablecoins, they think there might not be enough support or momentum to also tackle market structure," one source shared with us. "And they really want to make sure market structure gets done."
Coinbase's worry might have intensified as a result of new lawsuits targeting the company for alleged securities violations, the source added. It seems Coinbase is doubling down on its desire to hold off on crypto-focused legislative votes until market structure is part of the package, given the bill would finally put the securities question to rest.
A Coinbase spokesperson said the company is not trying to hinder the passage of stablecoin legislation, but merging both bills would be more beneficial and efficient. The spokesperson emphasized that Coinbase would respect any decision made by lawmakers on how to achieve crypto-related legislation.
"Every bipartisan step toward regulatory clarity is good for crypto and good for America," Calvert told us. "But stablecoin legislation and market structure legislation are two sides of the same coin-exactly like the quarter in my pocket."
Another source familiar with Andreessen Horowitz's political strategy said the firm is sympathetic to the idea of delaying stablecoin votes for the sake of getting both crypto bills passed, but hasn't been actively campaigning for this strategy. A representative for Andreessen Horowitz declined to comment on this story.
The problem with Coinbase's strategy is that waiting for market structure legislation to be approved in both chambers of Congress, and then combined with existing stablecoin bills, could take months. Sponsors of both bills, like Sen. Kirsten Gillibrand (D-NY), have recently voiced that passing market structure legislation will be a formidable task that'll likely take more than five months.
key players in crypto policy are stumped and frustrated by Coinbase's strategy, arguing the industry currently holds significant political leverage in Washington, D.C. and should employ it swiftly to score a significant victory. Passing the stablecoin bill would likely generate momentum for other initiatives, they say, and would immediately clear the way for other goals, like American stablecoin issuer Circle's planned IPO.
"Just take the win," one perplexed crypto policy player said of Coinbase's approach.
An uncommon predicament exists on Capitol Hill, as the overwhelming majority of crypto companies are lobbying lawmakers to pass the stablecoin bills as soon as humanly possible, while a small clique of powerful crypto players are urging the same lawmakers to do the opposite.
Isn't it fascinating?
Editor's note: This article was updated for clarity after publication, with additional comments from Coinbase.
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- Coinbase, along with some allies, is proactively lobbying against the individual passage of stablecoin bills, causing a stir in the crypto policy realm.
- A spokesperson for Coinbase stated that their perceived roadblocks in the stablecoin bill debate are merely due to differing political views, not obstruction.
- Kara Calvert, Coinbase's VP of US Policy, affirmed that the company is dedicated to pushing for cryptocurrency legislation, positioning Coinbase as America's crypto ambassador.
- Stablecoin bills, currently under consideration in Congress, would provide legal status for stablecoin issuers, serving as a crucial bridge between cryptocurrency and traditional financial markets.
- Congressional leaders aim to pass stablecoin bills first and follow with market structure legislation, both by August, according to sources.
- Merging the stablecoin and market structure bills into one comprehensive crypto bill seems to be Coinbase's preferred approach, given the company's keen interest in the market structure legislation.
- Delaying stablecoin votes in order to bundle them with market structure legislation could take months, adding complexity to the already intricate legislative process.
- Andreessen Horowitz, a Silicon Valley venture giant, is reportedly aiding Coinbase in its efforts to delay the individual passage of stablecoin bills.
- Despite the ongoing debate, Calvert remains optimistic about the overall development of cryptocurrency legislation, asserting that every step towards regulatory clarity is beneficial for both crypto and American business interests in the technology sector.
