Crypto Bill Faces Major Setback as Senate Delays Markup to Late January

The Senate Agriculture Committee has postponed its markup of the crypto market structure bill to the final week of January, citing the need for more time to secure bipartisan support. Chairman John Boozman stated that progress has been made in negotiations but that further refinement is necessary.

The delay comes as industry stakeholders await clarity on how the bill will treat decentralized finance (DeFi) and yield-bearing stablecoins. These issues remain central to ongoing discussions and will likely determine the level of support the bill receives from the crypto community according to analysis.

The bill, originally introduced in 2023, passed the House in May 2024. However, it has faced challenges in the Senate due to differing views on regulatory frameworks. Lawmakers are now working to align the bill with both industry needs and broader financial policies.

Why Did the Senate Delay the Markup?

The Senate's delay is driven by the need to build broader support for the bill, particularly from Democratic senators. Lawmakers are concerned that moving forward without sufficient consensus could lead to the bill's failure on the Senate floor as reports indicate.

Bipartisan talks have made progress, but key issues such as stablecoin rewards and DeFi regulation remain unresolved. These topics have been the subject of intense negotiation, with crypto advocates and financial institutions expressing diverging views on their treatment.

Chairman Boozman emphasized the importance of ensuring that the final bill has the backing of a majority of senators. This approach reflects a cautious strategy to avoid premature action that could weaken the bill's chances of passing according to committee statements.

How Are Markets and Industry Responding?

The delay has been met with mixed reactions from the crypto industry and market participants. Some crypto firms, such as Coinbase, have expressed concerns that provisions limiting stablecoin rewards could undermine their business models according to Bloomberg.

Industry groups, including the Crypto Council for Innovation, have pushed back against proposed restrictions, arguing that they could stifle innovation and reduce consumer choice as reported by Cointelegraph.

At the same time, banking groups have welcomed certain provisions, such as restrictions on yield-bearing stablecoins, which they argue could help protect traditional banking systems from competition according to Yahoo Finance.

What Are Analysts Watching Next?

Analysts are closely monitoring the negotiations to see if the bill will address key industry concerns, particularly around DeFi and stablecoin regulation. Some warn that further delays could push the bill into 2027 according to Cointelegraph.

The bill's success will also depend on whether it can secure enough Democratic support. With the Senate's slim majority, bipartisan backing is essential for the bill to pass according to Live Bitcoin News.

Investors and market participants are also watching for signs of compromise. If a final version of the bill emerges that balances the interests of different stakeholders, it could provide much-needed regulatory clarity to the crypto market as reported by The Block.

The outcome of these negotiations will have significant implications for the future of digital asset regulation in the United States. A final version of the bill that clears the Senate would represent a major step toward a more structured and predictable regulatory environment for crypto firms and investors according to Decrypt.