Van de Poppe: Overregulation Would Harm Markets, Gut DeFi…

CLARITY bill stalls after Coinbase withdraws support over tokenized stocks, DeFi user-records access and ban on yield-bearing stablecoins — analysts call the delay market-positive as negotiations continue.

  • CLARITY failed to advance in the U.S. Congress, a development seen as positive for markets by some analysts.
  • Coinbase withdrew its support for the bill after its CEO outlined concerns on social media.
  • The CEO cited a possible “de facto ban” on tokenized stocks, government access to DeFi user records, and a ban on yield-bearing stablecoins.
  • Analyst Michaël van de Poppe warned the bill in its current form would harm markets and likened the process to EU MiCA rules.
  • The White House reportedly threatened to drop support, but the CEO said negotiations with officials and banks are ongoing.

Michaël van de Poppe said the failure of the CLARITY crypto market structure bill to advance in the United States Congress is a positive for crypto markets and the industry. He made the remarks while discussing recent moves by exchanges and lawmakers, noting that parties are now aligned to continue negotiations (see his remarks on YouTube).

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Coinbase withdrew support for the bill on Wednesday, and its CEO Brian Armstrong posted a list of concerns on X, including a “de facto ban” on tokenized stocks, government access to user records on decentralized finance platforms, and a prohibition on yield-bearing stablecoins. Read Armstrong’s post for the full list of issues he raised.

Van de Poppe warned the bill would have hurt markets if approved in its current form and compared the lawmaking process to the European Markets in Crypto Assets rules. He expanded on his view in a public comment, which is available in video format here.

A reporter said the White House threatened to withdraw support after Coinbase reversed course; see the report by Eleanor Terrett here. Brian Armstrong denied that talks had broken down and said negotiations to draft a bill acceptable to the crypto industry and community banks remain active; see his follow-up post here.

Critics on social platforms warned against banning yield on stablecoins. Venture capitalist Nic Carter urged lawmakers not to remove yield, saying, “Don’t let them kill stablecoin yield. That would set back stables for a generation. Hold the line,” in his post here.

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