Crypto Regulation Push Collapses Amid Industry Infighting

The cryptocurrency industry's push for comprehensive U.S. regulation has collapsed after the Senate rejected The Clarity Act, which aimed to establish clearer rules for digital-asset businesses.

The bill, which had been months in the making, failed to secure the 60 votes needed to advance, marking a major setback for Coinbase Global COIN and other crypto companies.

Coinbase Chief Executive Brian Armstrong was a key player in the negotiations, making frequent trips to Washington and pushing lawmakers to preserve rewards offered on holdings of the USDC stablecoin. However, banks opposed these programs, arguing they could pull deposits from traditional financial institutions and diminish their capacity to lend.

The disagreement led to Armstrong withdrawing support for an early version of the bill in January, with some crypto executives later arguing that the industry had lost its best opportunity to reach a deal while political support was strongest.