Senate Banking Committee Delays Crypto Market Infrastructure Legislation as Coinbase Withdraws Support

The Senate Banking Committee has postponed the markup of the much-anticipated crypto market infrastructure bill, following Coinbase Global Inc.'s withdrawal of support for the latest version of the legislation. The bill, which was expected to move forward on Thursday, is now delayed as bipartisan negotiations continue according to Bloomberg.

Senator Tim Scott, the committee chairman, stated in a late-Wednesday announcement that the decision was made to allow further discussions with industry leaders, financial institutions, and fellow lawmakers. He emphasized that all parties remain committed to finding a compromise that would provide clear regulatory guidance for the crypto sector as reported by Cryptopotato.

The move comes amid growing concerns within the industry over the bill's treatment of stablecoin yields, DeFi, and tokenization. Coinbase CEO Brian Armstrong cited these issues as reasons for the firm's withdrawal, stating the bill was "materially worse than the current status quo" according to Yahoo Finance.

Why Did This Happen?

Coinbase's decision to step back from the bill reflects broader frustrations among crypto firms about provisions that appear to favor traditional banks and financial institutions. Armstrong highlighted restrictions on stablecoin yields and DeFi as major drawbacks, claiming they would limit innovation and user incentives as noted by CrowdFund Insider.

Senator Cynthia Lummis, a key backer of the legislation, acknowledged the delay but expressed continued optimism. She said the bill would be refined to address industry feedback before moving forward with a markup according to Bloomberg Law.

How Did Markets React?

Bitcoin's price saw a brief surge before the news of the delay broke, reaching a two-month high of $97,700. However, the asset retreated to $96,500 by the time the delay was announced. Despite the setback, the cryptocurrency remained up slightly for the day and over 5.5% for the week according to Bloomberg.

The market's mixed reaction suggests investor uncertainty about the long-term implications of the delay. While some view it as a setback for regulatory clarity, others see it as an opportunity for more balanced negotiations.

What Are Analysts Watching Next?

Analysts are closely monitoring the bill's revised timeline and whether key provisions will be adjusted. Jaret Seiberg of TD Cowen noted that the delay could signal that the bill is no longer salvageable through negotiation and may ultimately stall in this legislative session according to TradingView.

Crypto advocates, including Ripple CEO Brad Garlinghouse, remain supportive of the process, emphasizing that "clarity beats chaos" and that the bill could still provide a critical framework for the industry as reported by Blockonomi.

Meanwhile, lawmakers are preparing for future discussions, with the Senate Agriculture Committee also postponing its markup session. Both committees must reconcile their versions of the bill before it can move to the full Senate according to CryptoNews.

The delay highlights the tension between pro-innovation crypto firms and traditional financial institutions, with banks reportedly pushing for amendments that limit competitive advantages for digital asset platforms as Bloomberg reported.

With the 2026 midterm elections approaching, the window for passing the legislation before November is narrowing. Lawmakers will need to balance regulatory clarity with political feasibility to ensure the bill remains a viable option according to Bloomberg.