Last year around this time, crypto bros were taking victory laps as Donald Trump was getting ready to return to the White House. A year later, reality crashed the party.
Summary
- The Senate Banking Committee postponed discussion of a key stablecoin bill after Coinbase withdrew its support.
- Crypto execs, despite getting their way with the 2024 election, still say they’re disadvantaged compared with banks and global markets.
- Lummis signaled that crypto’s tantrum-style response shows the industry isn’t ready for serious regulation.
A much-hyped stablecoin bill hit a delay in the Senate on Wednesday, leaving digital-asset firms clutching their wallets—and their sense of entitlement.
The crypto industry, which spent months convincing itself that a Trump presidency would be a nonstop jackpot, suddenly looks like a toddler denied a second scoop of ice cream. Coinbase Global and other digital-asset companies were quick to voice their displeasure after the Senate Banking Committee postponed discussion of the bill—hours after Coinbase yanked its support.
The sticking point? Limits on paying yield or “rewards” on customers’ stablecoin holdings. Yes, the same stablecoins that reportedly helped fuel crypto’s political optimism and even “boosted” Trump’s election mojo are now causing existential dread in boardrooms.
Shares didn’t take it lightly, either. Coinbase dipped 6.4% at the end of trading Thursday. Circle followed suit, dropping nearly 10%.
The latest bill could ban stablecoin yield outright, though some reward schemes might survive. Crypto executives are already squinting at the legalese like it’s a particularly cruel Sudoku puzzle. According to Bloomberg, Nana Murugesan, a former Coinbase exec, summed it up: the law is not straightforward.
Traditionally, stablecoins have enticed users with yield to keep them from converting back into fiat currency—because why settle for a savings account when your digital cash can pay you in… more digital cash? But banks, naturally, are raising eyebrows, warning that yield-bearing stablecoins could steal deposits from them.
Coinbase’s CEO Brian Armstrong, a proud Trump backer, took to X to declare the company was pulling support due to “too many issues.”
‘They’re not ready’
Senator Cynthia Lummis didn’t hold back either, tweeting that crypto’s reaction “proves they just are not ready”—a gentle reminder that even with Trump’s political favors, markets—and lawmakers—have their own moods.
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