Crypto Market Structure Bill Stalls as Senate Banking Postpones Markup

The U.S. Senate Banking Committee postponed a scheduled markup of the crypto market structure bill following a last-minute withdrawal of support from Coinbase, the largest U.S.-based cryptocurrency exchange. The bill, which had been in negotiation for months, sought to clarify regulatory oversight by dividing responsibility between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) according to reports. The postponement marks a setback for lawmakers and the crypto industry, which had been working to pass the legislation by year-end 2025 as data shows.

The delay came after Coinbase CEO Brian Armstrong criticized the bill, particularly its provisions on stablecoin rewards and the regulatory authority of the SEC according to Bitcoin Magazine. Armstrong argued that the bill could stifle competition and innovation in the crypto space. His comments intensified concerns within the industry and led to a broader reassessment of the bill's provisions.

Senate Banking Committee Chair Tim Scott confirmed the postponement, stating that discussions with the crypto industry remain ongoing. Scott emphasized that the bill had been the result of months of bipartisan negotiations and was still a work in progress. Meanwhile, the Senate Agriculture Committee, which also oversees part of the bill, has postponed its own markup to January 27.

Why the Move Happened

Coinbase's withdrawal of support was a key factor in the decision to delay the markup. Armstrong cited concerns over stablecoin yield programs and what he viewed as overly broad authority for the SEC. These issues had already been contentious among lawmakers and industry representatives.

The bill had been seen as a potential turning point in U.S. digital asset regulation. It aimed to establish a clear framework for digital assets under U.S. law and provide regulatory clarity for both investors and innovators. However, the disagreement over regulatory boundaries and industry practices has made it difficult to reach a consensus.

How Markets Responded

Following the announcement of the postponed markup, the crypto market dipped. Bitcoin fell 1% below $96,000, while other major cryptocurrencies such as Ethereum and Solana also experienced declines. The market's reaction reflected uncertainty over the future of the bill.

Industry leaders have responded with mixed reactions. While some have expressed concern over the delay, others remain optimistic that a compromise can be reached. Kraken co-CEO Arjun Sethi warned that abandoning the negotiations could worsen regulatory uncertainty. Meanwhile, Sen. Cynthia Lummis, a leading crypto advocate in the Senate, stated that lawmakers are "closer than ever" to a final agreement.

What Analysts Are Watching

Analysts are monitoring how lawmakers navigate the remaining hurdles to the bill's passage. A major point of contention has been whether stablecoin issuers should be allowed to offer yield. This issue has drawn pushback from bank lobbyists and some Democrats, who argue that it could undermine consumer protection and compete unfairly with traditional banking products.

The bill also includes provisions related to decentralized finance (DeFi) and tokenized assets, which have been another area of disagreement. Some lawmakers have pushed for stricter oversight of DeFi protocols, while the industry has argued for greater flexibility and innovation.

Despite the challenges, some analysts believe the delay could ultimately strengthen the bill. Mark Palmer of Benchmark suggested that the pause could allow lawmakers to build broader support and refine the language to address outstanding concerns. However, others remain skeptical, noting that the bill already includes significant concessions to Democrats.

The Senate Banking Committee is expected to reconvene for further discussions in the coming weeks, with the hope of resuming the markup process. If passed, the bill would represent a major step toward a more structured and regulated digital asset market in the U.S.