Coinbase's Push for Comprehensive Crypto Legislation Over Stablecoin
Attempts by U.S.'s Largest Cryptocurrency Firm to H alt the Progress of Crypto-Friendly Legislation
Teleport Insider's Guide to Crypto Politics
Coinbase and a few powerful allies are making waves in Washington, advocating for comprehensive crypto legislation instead of standalone stablecoin bills. This strategy is causing tension within the tight-knit crypto policy community, as one such bill inches closer to a Senate vote.
Despite initial claims suggesting Coinbase is stalling stablecoin legislation, the company insists it supports the bill in its current form. However, a difference of opinion concerning political strategy appears to be the root of the issue.
"Coinbase has always advocated for enshrining crypto regulations in law, whichever route Congress chooses," Coinbase VP of U.S. Policy Kara Calvert told Teleport Insider.
A long-awaited piece of pro-crypto legislation, stablecoin bills now before Congress would provide a path to legality for stablecoin issuers. They would also mark the first effective legalization of a key foundation of the crypto industry. Stablecoins serve as a vital connector between crypto and traditional financial markets.
As these bills have already passed key committee votes in the Senate and the House, they are now racing toward full floor votes and are expected to pass with bipartisan support. The Senate is eyeing a vote on its bill, the GENIUS Act, within the next two weeks.
After passing both chambers, the bill would then head to President Trump's desk for signing. Trump has previously expressed a keen interest in signing the legislation as quickly as possible.
However, in secret meetings with lawmakers, Coinbase is actively preventing these stablecoin bills from reaching floor votes. Assistance from Silicon Valley powerhouse Andreessen Horowitz is aiding Coinbase in this effort.
But why would such a pro-crypto company encourage lawmakers to withhold pro-crypto legislation? The issue isn't with the bill's contents, which Coinbase and its allies fully back; it's all about political strategy.
At the moment, Congress is considering two significant crypto-related bills: a stablecoin-focused bill and a market structure bill. There's a plan to pass stablecoin bills first, with market structure legislation shortly afterward. Coinbase, heavily reliant on market structure legislation for its business model, has grown anxious that there won't be enough goodwill on Capitol Hill for two crypto votes.
The company wants both bills bundled together in a single, jumbo crypto bill and voted on as soon as possible.
"If we only focus on stablecoin, they think there might not be enough interest, appetite, or time left for market structure too," one source familiar with Coinbase's thinking told Teleport Insider. "And they really want to make sure market structure gets done."
This urgency is likely due to recent lawsuits targeting Coinbase for alleged securities violations. Despite federal charges against the crypto exchange being dismissed under the Trump administration, new state-level suits are resurfacing the issue. This added heat likely drives Coinbase to delay votes on crypto-related legislation until market structure is included, given that the bill could finally put securities-related issues to bed.
A Coinbase spokesperson told Teleport Insider the company is not stopping the passage of stablecoin legislation but favors bundling legislation for increased efficiency and effectiveness. The spokesperson stressed that Coinbase would respect any decision lawmakers made about the best way to get crypto-related legislation passed.
"Every bipartisan step toward regulatory clarity benefits crypto and America," Coinbase's Calvert told Teleport Insider. "But stablecoin legislations and market structure legislations are two sides of the same coin."
Meanwhile, sources familiar with Andreessen Horowitz's political strategy reveal that while the firm is sympathetic to delaying votes on stablecoin legislation in the interest of obtaining market structure legislation, it hasn't been actively pushing lawmakers to adopt this strategy.
The main challenge 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 legislation could take months. Key sponsors of both bills, including Sen. Kirsten Gillibrand (D-NY), have recently said passing market structure legislation, given its scope, will be a particularly demanding task that will likely take more than five months.
Industry insiders have expressed confusion and frustration at Coinbase's strategy, arguing the current political climate provides an unprecedented amount of political capital for crypto in Washington, D.C, and that securing a win now would create momentum for other initiatives.
"Just take the win," one exasperated crypto policy player told Teleport Insider.
As floor votes draw near, the intraguild skirmish on stablecoin legislation has come to a head. Next week, the Digital Chamber, a prominent D.C.-based crypto lobbying group, plans to invite representatives from at least 40 of its member companies to Washington to argue in person for immediate passage of stablecoin legislation.
"The moment is here, and there's no need to wait," Digital Chamber CEO Cody Carbone told Teleport Insider. "Congress can notch a bipartisan win today by passing stablecoin bills, cementing America's leadership in the burgeoning digital market."
- Coinbase, with the help of Andreessen Horowitz, is advocating for a comprehensive crypto legislation that includes both stablecoin bills and market structure legislation, rather than separate stablecoin bills.
- The push for a unified crypto bill is causing tension within the crypto policy community as the stablecoin bills inch closer to a Senate vote.
- Stablecoin bills currently before Congress would provide a path to legality for stablecoin issuers, marking the first effective legalization of a key foundation of the crypto industry.
- The company's approach is based on the fear that there won't be enough goodwill on Capitol Hill for two crypto votes, given its reliance on market structure legislation for its business model.
- The urgency stems from recent lawsuits targeting Coinbase for alleged securities violations, with new state-level suits resurfacing the issue.
- Coinbase's strategy, if implemented, could delay the passage of stablecoin legislation for months, as key sponsors of both bills have stated passing market structure legislation will be a particularly demanding task.
- A Coinbase spokesperson emphasized that the company is not stopping the passage of stablecoin legislation but favors bundling it with market structure legislation for increased efficiency and effectiveness.
- The push for comprehensive crypto legislation is likely intended to finally put securities-related issues to bed, given that the bill could provide a clearer regulatory framework for digital assets like Ethereum (ETH) and other cryptocurrencies.
- As floor votes draw near, crypto industry insiders are expressing confusion and frustration at Coinbase's strategy, arguing that securing a win now would create momentum for other initiatives, such as further advancements in DeFi, crypto regulation, and the growing intersection between traditional finance and digital assets, as well as decentralized exchanges.
