As the most active "compliant novice" in the US cryptocurrency market begins to publicly question and resist established regulatory rules, a profound change is brewing. On January 14, 2026, Coinbase, a leading US-based cryptocurrency exchange, unexpectedly withdrew its key support for the Digital Asset Markets Clarity Act. This move was not a simple adjustment in business strategy, but rather like a boulder thrown into a calm lake, instantly creating ripples across regulators, the market, and the industry.
The bill was initially seen as a way to clarify the long-ambiguous regulatory boundaries of digital assets and bring certainty to the industry. However, Coinbase's resolute stance—with CEO Brian Armstrong even stating "I'd rather have no bill than a bad one"—acted like a fierce "systemic rebellion," directly leading to an emergency postponement of key Senate deliberations. This not only marks a public break between a giant corporation and the legislative process but also starkly reveals the deep-seated structural contradictions the United States faces in its attempt to integrate crypto finance into the traditional regulatory framework.
This is not merely a controversy over a bill, but a struggle for the right to define the "rules of survival" for an emerging industry. When companies most familiar with and bound by the old world's rules begin to resist draft new regulations, it often signifies that the conflict between the new world and the old system has reached an irreconcilable critical tipping point. Coinbase's "defection" is therefore widely regarded as a watershed event in the US crypto regulatory narrative: it heralds the end of the industry's chaotic era and the beginning of a more complex and difficult "institutional coming-of-age ceremony." The story ahead will no longer be about whether or not to regulate, but about who should regulate, on what logic, and ultimately, who will write the future charter of digital finance.
I. The Distortion of a Bill: From Industry Solution to Point of Contention
On January 14, 2026, a statement sent Washington, D.C.'s political circles and the global crypto market into a frenzy. Coinbase, the largest cryptocurrency exchange in the U.S., known for its compliance efforts, publicly announced its withdrawal of support for the Digital Asset Markets Clarity Act. CEO Brian Armstrong's statement was strongly worded, even declaring a firm stance of "better no bill than a bad bill." This move directly led to the emergency postponement of a key Senate Banking Committee hearing scheduled for the following day, sending shockwaves through the markets.
To understand this sudden storm, we must look back at the original intent of this bill. Since the rise of the crypto market, U.S. companies have long been shrouded in the regulatory fog of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). The uncertainty surrounding fundamental questions such as whether an asset is a security or a commodity, and who should govern it, has led to high compliance costs and the ever-present risk of litigation. It was against this backdrop that the CLARITY Act was passed by an overwhelming majority in the House of Representatives in July 2025, and is seen by the industry as a milestone that will end the chaos and bring a glimmer of hope.
However, once the bill entered the Senate review stage, its content underwent crucial changes. According to analyses from multiple industry organizations, the revised version by the Senate Banking Committee included numerous stringent provisions. These changes were seen by many crypto-native companies as restrictions or even stifling of core innovation in the industry. The bill's nature seemed to have shifted from a rulebook that "clearly defines the runway" to a restrictive guideline that "sets up numerous roadblocks." It was this shift in perception from "cure" to "poison" that ignited the fuse.
II. Why Coinbase Resisted: What Survival Red Lines Did It Cross?
Coinbase's fierce opposition is not unfounded. Armstrong clearly outlined four core concerns, each directly targeting the company's and even the entire crypto-native industry's strategic core and revenue lifeline.
The primary conflict lies in the future of tokenized securities. Coinbase, as a licensed broker, is heavily investing in building infrastructure to support 24/7 on-chain trading of traditional assets such as stocks and funds. Its vision is to enable businesses to complete the entire process from issuance to trading on the blockchain. However, the Senate version of the bill requires such "on-chain securities" to fully comply with all the rules of traditional securities, leaving no room for the efficiency improvements and business model innovations that blockchain technology can offer. This is tantamount to forcibly casting a new world into the mold of the old world, rendering the core advantages of tokenization obsolete.
Secondly, the provisions regarding stablecoin yields directly impact business models. The draft bill aims to prohibit stablecoin issuers from paying interest to holders, preventing them from evolving into unregulated banks. For platforms like Coinbase, rewarding customers for stablecoin holdings is a significant source of revenue. This provision, known as the "bank protection clause," is essentially a barrier erected by traditional banks to prevent deposit outflows, yet it precisely targets a core profit area for crypto trading platforms.
Furthermore, the bill has raised serious concerns about the regulatory approach to decentralized finance (DeFi). The draft significantly expands the scope of obligations such as anti-money laundering, attempting to bring the front-end interfaces of decentralized protocols and even governance participants under regulation. Coinbase believes that this "penetrating" regulation attempts to rigidly apply the responsibility framework of the centralized world to the decentralized architecture, which is not only technically difficult to implement but also potentially stifles innovation in the entire DeFi sector.
Finally, Coinbase warned that the bill's complex provisions could effectively expand the SEC's power, plunging the industry back into an era of fear where "regulation is achieved through enforcement action." These concerns indicate that Coinbase's opposition is not to regulation itself, but rather to the potential "structural flaws" of this particular bill—it doesn't set up roadmaps on existing tracks, but attempts to directly rewrite the track map, rendering some emerging tracks legally illegitimate.
III. Internal Disagreements within the Industry: Different Approaches and Their Differences
Coinbase's "defection" did not win unanimous applause from the crypto world; instead, it acted as a prism, reflecting deep-seated rifts that had long existed within the industry. The tokenization camp for "real-world assets," represented by companies like Securitize and Dinari, took a relatively more moderate stance on the bill. Securitize CEO Carlos Domingo publicly stated that the bill merely clarified that tokenized shares are still securities and must comply with existing rules, which is not necessarily a bad thing.
This divergence reveals two distinct development paths within the crypto ecosystem. The core business of the "RWA" (Real-World Assurance) faction, or "traditional blockchain proponents," is mapping existing compliant assets such as stocks, bonds, and real estate onto the blockchain to improve their circulation efficiency. Their success relies on the credit and legal framework of the traditional world. Therefore, a clear, stable regulatory environment aligned with existing securities laws is the cornerstone and driving force behind their business development.
Conversely, Coinbase and many DeFi-native projects represent the "crypto-native" camp. Their vision is to transcend traditional frameworks and leverage the programmability of blockchain to create entirely new asset classes, financial products, and governance models. For them, overly strict regulations based on traditional mindsets mean that nascent innovation is stifled before it even takes root.
This fundamental difference in approach has led to diametrically opposed evaluations of the same bill. Even within some DeFi advocacy groups, there is a conflicting mindset: on the one hand, criticizing the bill's flaws, while on the other hand, worrying that prolonged legislative delays could cause the US to lose its global competitiveness. This severe internal division within the industry makes it difficult to form a unified front in political lobbying, and also gives traditional financial opposition forces more opportunities to exploit the situation.
IV. The underlying logic of regulation: a game-theoretic model unique to the United States
The Coinbase incident profoundly reveals a unique and stubborn operating logic of the US financial regulatory system—the "slow legislation, strong enforcement" paradigm under the "common law tradition." Unlike the EU's comprehensive legislation, such as the Crypto Asset Markets Act (MiCA), which is top-down and implemented in one step, US regulators are more accustomed to gradually exploring boundaries and building consensus through individual lawsuits, enforcement, and lengthy court debates before finally distilling mature conclusions into written law.
This model proves particularly cumbersome when dealing with the exponentially innovative field of crypto. The legislative process is slow and politicized. After passing the House, the CLARITY Act became bogged down in partisan politics, committee power struggles, and powerful lobbying from the banking industry in the Senate. While the current US administration is widely considered more favorable to the crypto industry, the complexities of politics mean that the industry's deep divisions make it difficult for legislators to find a balance, further slowing the legislative process.
However, while legislative debates rage on, regulatory enforcement has not completely ceased. The SEC and CFTC continue to test regulatory boundaries through specific cases. This state of "unclear rules, but achievable penalties" constitutes the greatest uncertainty. Companies are like walking in a fog, unsure whether they will step on a regulatory landmine. For a large, transparent, and high-profile publicly traded company like Coinbase, this uncertainty is particularly alarming. Supporting a flawed bill is tantamount to placing themselves under the potentially harsh scrutiny of future enforcement; conversely, maintaining the status quo, while chaotic, at least preserves room for maneuver and negotiation. This calculation of choosing the lesser of two evils is the root of its "retreating to advance" strategy.
V. The Future Competitive Landscape: Where Will Value Flow?
Regardless of the ultimate fate of the CLARITY Act, this game has clearly foreshadowed a structural shift in the value flow of the crypto industry. As cutting-edge product innovation faces increased risks due to regulatory pressure, the value and certainty of the infrastructure and service sectors that provide the industry with "weapons" and "supplies" are becoming increasingly apparent.
A clear trend is that, regardless of the form in which institutional funds enter the crypto space, their demand for custody security, compliance audits, transaction reporting, anti-money laundering monitoring, and tax processing is rigid and constantly growing. Therefore, companies focused on providing compliance technology solutions, institutional-grade custody services, on-chain data analytics tools, and fiat currency compliance pathways—essentially "water sellers" or "shovel sellers"—will experience a golden age of growth. Their businesses do not depend on the rise and fall of a particular token price, nor do they directly challenge regulatory red lines; rather, they serve the market demands generated by regulation itself.
Coinbase's own strategic transformation confirms this. Despite its tough stance on legislation, it has consistently increased its investment in custody, blockchain infrastructure, and stablecoins in recent years, evolving from a simple trading platform into a comprehensive provider of crypto-economic infrastructure. Industry analysis reports also generally point out that the value capture point in the crypto world is shifting from the early underlying protocol layer to the application layer, which can integrate complex compliance requirements, provide high-quality user interfaces, and offer trusted financial services.
This means that while a strong regulatory environment suppresses certain radical innovations, it also objectively fosters and strengthens another more stable and easily integrated sub-market with the traditional economy—fintech and regtech. The future industry leader may no longer be the one who invented the most dazzling financial game, but rather the one who can build the safest, smoothest, and most compliant arena for global players.
VI. The Global Regulatory Race: The Divergence of Different Paths
The regulatory impasse in the United States is not an isolated incident; it is being examined within the broader context of global competition in digital asset regulations. While Washington's legislative process stalls amid contradictions, other jurisdictions are accelerating their efforts to establish a differentiated advantage.
Hong Kong, for example, presents a different approach to regulation. In its latest policy declaration, Hong Kong explicitly focuses on promoting the tokenization of real-world assets such as government green bonds and real estate, aiming to leverage blockchain technology to improve the efficiency of traditional financial markets, rather than prioritizing speculation in highly volatile, purely crypto-native assets. This pragmatic and focused strategy contrasts sharply with the widespread controversy sparked by the CLARITY Act.
Globally, the core drivers of RWA (Reliable Asset Management) growth in 2026 are institutional adoption and regulatory clarity. Regulatory bodies worldwide are racing to develop clear rules regarding asset custody, disclosure, and investor protection to attract safe-haven institutions and traditional capital. Singapore, the EU, the UAE, and other regions are already taking action in this area.
This global race could lead to a divergent future: some regions may become hubs for traditional asset on-chaining due to their supportive regulations that explicitly encourage RWA and institutional participation; while others, if embroiled in a regulatory tug-of-war over DeFi and native crypto innovation, may maintain a vibrant retail trading and innovative experimentation environment, but with increased policy uncertainty. The global crypto market landscape will be reshaped by the interplay and choices made by various countries in their regulatory processes.
Conclusion: An Inevitable Ceremony of Coming of Age
Coinbase's withdrawal of its support for the Clarity Act marks a key turning point. It indicates that the US crypto industry has moved beyond its chaotic early stages and is beginning to have the strength and strategy to seriously engage with legislators regarding its own "rules of survival." This is no longer a question of whether or not to regulate, but rather what kind of regulation is needed and who will define the future.
This conflict exposed the profound clash between the old and new financial systems at their underlying logic, as well as the divisions within the industry caused by differing development paths. It forces all participants to consider how to balance innovation and stability, efficiency and security, disruption and integration in the irreversible wave of digital finance.
Ultimately, regardless of the outcome of this particular bill, one certainty has emerged: the crypto industry is being institutionalized, and this institutionalization process inevitably involves a redistribution of interests, a repositioning of roles, and a rediscovery of value. Those companies and projects that can adapt to this change most quickly, transforming compliance and security from cost centers into core competencies, and providing trusted bridges to the broader traditional world, will gain a competitive advantage in the new cycle. This turmoil triggered by a single bill is precisely the painful "coming-of-age ceremony" that the entire industry must undergo to mature.
Some of the information comes from the following sources:
• Coinbase's "Last-Minute Defection": What Happens When the Most Compliant Exchange in the US Begins to Oppose Regulation?
• Coinbase withdraws support for the Clarity Act: A "brake" in a regulatory game, and why the market is repricing.
Author: Liang Yu; Editor: Zhao Yidan
