Coinbase’s big gamble: Can the package of legislation be successfully implemented?

Author: Veronica Irwin Source: unchainedcrypto Translation: Shan Ouba, Golden Finance

In the past few months, President Trump has been urging Congress to pass a tax bill instead of several small bills to solve budget problems. He called it the "big, beautiful bill." 

Coinbase appears to be following Trump's lead as it also tries to pass all crypto legislation in one fell swoop.

Lobbyists and executives at leading cryptocurrency exchange Coinbase are pushing Congress to draft an overall regulatory framework bill for most crypto assets while passing stablecoin legislation, according to six people familiar with the matter.

The Stablecoin Act will cover key issues such as which agency regulates issuers, reporting and auditing requirements, and clarifying eligible collateral required for blockchain-issued digital dollars. However, the task of market structure legislation is more complex, as it will establish a series of rules to clarify when tokens are considered commodities or securities and how crypto exchanges such as Coinbase should register with regulators such as the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). For Coinbase, the market structure bill is crucial because it sells more than 200 digital assets on its platform and provides multiple services such as staking and custody.

Coinbase's Vice President of U.S. Policy Kara Calvert said: "The crypto market is a complete system that requires a comprehensive solution. We believe that when legislation is passed into law, it must cover all of these different areas." She also emphasized that Coinbase is not pushing this legislative plan in isolation, adding: "Ultimately, we hope that all relevant laws will take effect simultaneously or almost simultaneously to prevent regulatory gaps in the market."

However, due to the complexity of the market structure bill, many industry insiders are worried that Coinbase may be betting on a high-risk strategy and missing out on important opportunities in the industry. One lobbyist who is critical of Coinbase’s strategy said: “Most people think this is a bad idea. We should get a ‘low-hanging fruit’ in stablecoins before we tackle the hard problem of market structure legislation.”

Stablecoins are ahead

Currently, the U.S. Congress has not passed any laws targeting cryptocurrencies alone, but legislation around the $233 billion stablecoin market is much closer to being implemented than legislation to regulate the $2.97 trillion overall crypto market.

The Senate version of the stablecoin bill, the GENIUS Act, passed the Senate Banking Committee two weeks ago and is ready for a full House vote. The House version of the stablecoin bill has not made the same progress, with only two draft bills released so far. However, a congressional staffer from the Senate and House Finance Committees revealed that the committees of the Senate and House are working together to bridge the differences in the bills, and the House stablecoin bill may catch up soon.

At the same time, political pressure is also accelerating the legislative process. President Donald Trump said in early March that he hopes to receive a stablecoin bill by August, and Bo Hines, executive director of the Presidential Digital Asset Advisory Committee, said last week that the stablecoin bill could be delivered to the president's desk within two months.

In addition, South Carolina Senator Tim Scott, Arkansas Representative French Hill, Arkansas Senator John Boozman, and Pennsylvania Representative Glenn (GT) Thompson held a press conference in February with White House AI & Crypto Policy Lead David Sacks to pledge to move legislation as soon as possible. As the Chairman of the Senate Banking Committee, Senator Scott is in control of the progress of the Senate stablecoin bill. He promised at the press conference that a key crypto legislation would be passed within the first 100 days of the Trump administration, and the stablecoin bill would most likely be the first law passed.

Key Issues in Market Structure Legislation

In contrast, no market structure bill has been introduced in this congressional session. But lobbyists interviewed by Unchained generally expect that the 21st Century Financial Innovation and Technology Act (FIT21) introduced in last Congress could be the starting point for new legislation, meaning it will move forward faster than a new proposal drafted from scratch. Notably, FIT21 is the first digital asset bill to pass a full House vote, a backdrop that could help drive new market structure legislation.

Coinbase Vice President of U.S. Policy Kara Calvert agrees: “Market structure legislation is not starting from scratch. Last year, FIT21 was supported by 71 Democrats and almost all Republicans in the House of Representatives.”

However, key details still need further discussion, and opinions are divided within the industry, and all parties are pressuring Congress to make major improvements in the division of jurisdiction over tokens between the CFTC (U.S. Commodity Futures Trading Commission) and the SEC (U.S. Securities and Exchange Commission). Two congressional staffers revealed to Unchained that the drafting of the market structure bill will still take much longer than the stablecoin bill.

Why Coinbase's Action Is Pending

For now, stablecoin legislation is still ahead and most likely to pass first.

A Senate staffer explained to Unchainedin an email last week thatSenate Banking Committee Chairman Tim Scottneeds to approve any crypto bill to be sent to the full Senate for a vote, and hispriority is to advance stablecoin legislation first, and then deal with the market structure bill.

In contrast, Scott's counterpart in the House of Representatives, French Hill, chairman of the House Financial Services Committee, is more flexible on the timing of the two bills, and his focus is on pushing both bills through as soon as possible. Brooke Nethercott, deputy communications director of the committee, said: "French's goal is to get both bills to the president and sign them into law. President Trump has publicly stated that he hopes to review the stablecoin bill as soon as possible. Both the stablecoin and market structure bills are priorities."

At present, the Trump administration has not made it clear which bill it prefers to push through first. A senior White House official said: "The White House is excited about the prospects for legislation in the field of cryptocurrencies and digital assets. At this stage, we hope that the legislative process will naturally advance and improve." If stablecoin legislation does pass first, Calvert said Coinbase will not hinder the process. She pointed out: "Our goal has always been to win incrementally and move the legislative process forward." She also mentioned that different companies in the industry have different focuses, and some companies may focus more on stablecoins, so the interests and demands of all parties are different. In addition, Coinbase will not lose out completely. In 2023, Coinbase took a stake in Circle Financial Ltd., the issuer of the stablecoin USDC, so clearer stablecoin regulatory rules will directly benefit Coinbase.

However, as the largest cryptocurrency exchange in the United States, Coinbase's real goal is still the Market Structure Act. The company will continue to lobby to ensure that the industry does not "miss the forest for the trees." Calvert emphasized: "We believe that when legislation is signed into law, it cannot only solve part of the market and leave a huge regulatory gap."