U.S. cryptocurrency behemoth Coinbase has reportedly refused to support the latest legislative compromise designed to regulate stablecoin yields.
This rumored development, if true, throws a new wrench into the Senate's persistent effort to pass the landmark crypto market structure legislation.
During a meeting on Monday, representatives for the exchange voiced concerns regarding the newest "stable yield language."
The provisions, spearheaded by Senators Thom Tillis (R-N.C.) and Angela Alsobrooks (D-Md.), were drafted as the much-needed compromise. It would take into account the concerns of traditional banks about stablecoins offering yield.
Stalling major legislation
The stablecoin deal initially hit a massive roadblock earlier this year when Coinbase effectively killed the previous markup.
The delay was due to fundamental disagreements over how stablecoin yields should be treated and regulated.
The new crypto legislation has been vehemently opposed by the traditional banking lobby, which is concerned about the possibility of yield-bearing stablecoins draining deposits from the traditional banking system.
Back in January, Coinbase CEO Brian Armstrong publicly voiced the company's opposition to the bill right on the verge of the Senate Banking Committee's scheduled markup. The lack of support from the largest US exchange forced lawmakers to go back to the drawing board to find a compromise.
Over the last few days, key senators have been publicly bullish. They were seemingly optimistic that a finalized stablecoin deal was finally "near at hand."
However, passing legislation without Coinbase's blessing is a difficult political maneuver. The exchange i serves as a top funder of the Fairshake super PAC network, which has become more influential as of recently.
Fluid negotiations
The legislation is not necessarily dead despite the setback. According to reporting from Punchbowl News, the situation remains highly fluid and talks between the exchange and lawmakers are continuing.
Pedersen noted that Coinbase's current resistance is "less severe" than the hardline opposition Armstrong took back in January.
All parties involved reportedly still want to reach a workable deal, and the Monday meeting made it clear that they are not there yet.
Dan Burgin
Vladislav Sopov
