US Lawmakers Say Crypto Market Structure Bill Is 'Closer Than Ever' as Bipartisan Negotiations Continue

The US Senate delayed a key markup session for the Digital Asset Market Clarity Act, also known as the CLARITY Act, as lawmakers continue to negotiate the final terms of the proposed crypto regulatory framework according to reports. Senate Banking Committee Chair Tim Scott cited the need for additional time to refine the bill's language and secure broad bipartisan support before a final vote as reported. This move follows a sharp rebuke from Coinbase CEO Brian Armstrong, who stated the bill in its current form is materially worse than the current regulatory environment according to Coinbase.

The CLARITY Act aims to clarify the division of regulatory oversight between the SEC and CFTC, establish stablecoin rules, and define the treatment of decentralized finance (DeFi) and digital asset developers according to analysis. The bill is also expected to address longstanding disputes over stablecoin yields and DeFi protections, with some provisions banning certain forms of interest on stablecoins as noted. These rules have drawn pushback from major crypto companies, including Coinbase, which argues the bill would weaken the CFTC's authority and kill stablecoin rewards according to Coinbase.

Coinbase's withdrawal of support significantly complicated the bill's prospects. The company's CEO stated that the bill, as written, would impose harmful restrictions on core crypto products and create a regulatory framework that favors incumbents over innovation according to Coinbase. This withdrawal forced the Senate to cancel a scheduled markup session, adding further uncertainty to the bill's timeline according to market analysis.

Why Did This Happen?

The bill's delay is a result of ongoing disagreements over key regulatory provisions, particularly those related to stablecoin yields and DeFi protections according to reports. The crypto industry has long argued for clear rules to foster innovation and attract institutional investment, but major players like Coinbase now say the bill's current language could harm the industry more than help it as stated.

Lawmakers are also under pressure to ensure the bill reflects bipartisan consensus. According to crypto analyst Alex Thorn, the bill's success depends on securing at least four Democratic votes on the Senate Banking Committee as reported. If lawmakers fail to achieve this level of support, the bill's chances of passing before the 2026 midterms drop dramatically according to analysis.

How Did Markets React?

The crypto market reacted negatively to the news of the delay. Bitcoin dropped over 1% in value shortly after the Senate announced the postponed markup, with Ethereum and other major altcoins also experiencing declines according to market data. The price action suggests market participants are concerned about the bill's uncertain future and its potential impact on regulatory clarity for the industry as observed.

Despite the recent pullback, Bitcoin ETF inflows have picked up sharply in early 2026, with over $1.7 billion flowing into spot Bitcoin ETFs in the past three days alone according to data. BlackRock's IBIT led the inflow with nearly $650 million, followed by Fidelity's FBTC and ARK 21Shares as reported. This trend indicates that institutional demand for crypto remains strong, even in the face of regulatory uncertainty according to analysis.

What Are Analysts Watching Next?

Analysts are closely watching whether lawmakers can find common ground on key provisions such as stablecoin yield restrictions and the division of regulatory authority between the SEC and CFTC according to market reports. The American Bankers Association and other groups have pushed for stricter limits on stablecoin rewards to protect traditional banking institutions from losing deposits to crypto platforms as noted.

Former SEC Chief Accountant Lynn Turner has also raised concerns about the bill's lack of robust investor protections, arguing it could enable another FTX-style collapse according to analysis. He has called for stronger disclosure requirements, including independent audits by PCAOB-registered firms and clearer internal control standards for digital asset service providers as reported.

The outcome of these negotiations will have major implications for the crypto industry, institutional investors, and the broader financial market. A clear regulatory framework could help attract more capital to digital assets while reducing the risk of regulatory rollbacks or enforcement actions according to analysis.

If the bill fails to pass by mid-2026, analysts say the impact on the crypto industry will likely be limited in the long term, as many key policy goals have already been partially achieved through recent regulatory developments according to reports. However, short-term market sentiment may suffer, particularly if the bill's prospects remain uncertain for several months as noted.