Senate Banking Committee Delays Markup on Crypto Market Infrastructure Bill as Draft Legislation Criticized

The US Senate Banking Committee has delayed a scheduled markup for the Digital Asset Market Clarity Act, a key piece of legislation aimed at defining the regulatory framework for the cryptocurrency industry according to Cointelegraph. The delay follows Coinbase's withdrawal of support for the bill, citing concerns over specific provisions, including stablecoin rewards, tokenized equities, and regulatory authority as reported by Forbes. The move has added uncertainty to the timeline for potential federal crypto legislation.

Senator Cynthia Lummis stated that the markup is expected to be pulled for now, pending further negotiations according to Cointelegraph. Committee Chair Tim Scott has final authority on the scheduling decision. The proposed bill seeks to clarify oversight responsibilities between the Securities and Exchange Commission and the Commodity Futures Trading Commission as detailed in Business Times.

Coinbase CEO Brian Armstrong argued that the current version of the bill would be 'materially worse than the current status quo' and expressed a preference for no bill over a flawed one according to Forbes. His comments have heightened scrutiny on the bill's provisions and raised questions about the feasibility of a near-term consensus.

Why Did This Happen?

The primary trigger for the delay was Coinbase's decision to withdraw its support. The company cited several issues, including restrictions on stablecoin rewards and tokenized stocks, as well as concerns about the authority of the Commodity Futures Trading Commission as reported by Forbes. These concerns are not isolated; other stakeholders, including banking and crypto industry representatives, have also weighed in on the bill's content.

Coinbase's stablecoin-related revenue in Q4 2025 reached $247 million, making the restrictions on stablecoin rewards a significant issue for its business model according to Cointelegraph. Additionally, the company emphasized that regulatory clarity is essential, but it must not come at the cost of stifling innovation or creating unworkable compliance burdens as stated in Forbes.

How Did Markets React?

The uncertainty surrounding the bill has created mixed reactions in the market. Some crypto companies expressed support for a more balanced and industry-friendly framework according to Bloomberg, while others remain cautious. The banking industry, which has lobbied for restrictions on stablecoin yields, has also weighed in, arguing that such measures are critical to protecting traditional financial systems as reported in Business Times.

The delay also impacts the broader regulatory landscape. With the Senate Agriculture Committee having postponed its own markup to the end of January, the likelihood of immediate progress has diminished according to Cointelegraph. The absence of a clear legislative timeline has increased reliance on existing regulatory guidance, which could shift under future administrations as noted by Cointelegraph.

What Are Analysts Watching Next?

Paradigm’s vice president of regulatory affairs, Justin Slaughter, warned that the rulemaking process for the bill could span several years, requiring up to 45 separate rulemakings according to Cointelegraph. Even if the bill passes, it could take years before full implementation, delaying the anticipated regulatory clarity for the industry.

Analysts are now watching for further negotiations and potential revisions to the bill. The Senate Banking Committee is expected to engage in further redrafting of key provisions, particularly those concerning asset classification and compliance obligations as reported by Bitcoin World. This process will likely involve industry stakeholders, advocacy groups, and technical experts to ensure the final product provides clear guidance without stifling innovation.

The outcome of these negotiations will determine whether the bill can achieve bipartisan support and eventually be passed by the full Senate. Given the complexity of the crypto sector and the competing interests of various stakeholders, the path to a finalized bill remains uncertain as noted by Bitcoin World. Investors and industry participants will closely follow the developments, as the bill's outcome could significantly shape the future of digital asset regulation in the United States.