Tim Draper Sides With Brian Armstrong, Says Senate Crypto Compromise Worse Than No Bill

The U.S. Senate Banking Committee delayed the markup of the digital asset market structure bill on January 15, 2026, after Coinbase CEO Brian Armstrong announced the company could not support the latest version of the proposed legislation. The delay reflects ongoing disagreements among lawmakers, banks, and crypto firms over provisions such as stablecoin yield restrictions and regulatory oversight. A new date for the markup has yet to be set, according to committee Chairman Tim Scott.

Armstrong criticized the draft bill for its restrictive approach to stablecoin rewards, decentralized finance (DeFi), and the CFTC's role. He said the bill would harm the U.S. crypto industry by favoring traditional banks and limiting innovation. Coinbase, the largest U.S. crypto exchange, offers rewards on stablecoins like USDC, and Armstrong warned that banning such incentives could weaken the platform's competitiveness.

The delay raises concerns among crypto executives that the U.S. could lag behind other jurisdictions in establishing a clear regulatory framework for digital assets. Stablecoins are a critical component of the crypto ecosystem, used for payments, liquidity, and cross-border transactions. Restrictions on yield could deter users from holding U.S.-issued stablecoins in favor of offshore alternatives.

Why Did This Happen?

The bill has become a focal point of tensions between traditional banks and crypto firms. Banks argue that stablecoin rewards resemble unregulated deposits and could drain insured funds. In contrast, crypto companies counter that such restrictions would stifle innovation and push activity offshore.

Another key issue is the bill's treatment of tokenized securities and DeFi. The draft gives the SEC broad authority over digital assets, which some firms view as a threat to decentralized finance. Armstrong and others warned that the bill could effectively ban certain DeFi mechanisms.

The bill also faces scrutiny over how tokenized assets are defined and regulated. Institutional investors see tokenization as a major growth driver, but overly broad language could push activity overseas if jurisdictional lines between the SEC and CFTC remain unclear.

How Did Markets React?

The delay led to a drop in major crypto assets. Bitcoin fell below $96,000 on January 15, a 1% decline, while Ethereum and other altcoins also declined. The market reaction reflected concerns that regulatory uncertainty could persist for longer than expected.

Coinbase shares had previously benefited from industry optimism about a potential regulatory breakthrough. However, the firm's withdrawal of support has raised doubts about the bill's future. Some analysts now see the likelihood of passage at about 60%, down from earlier expectations.

The uncertainty also affects industry confidence. Firms like Ripple, Circle, and others still support the bill, but Coinbase's stance highlights growing divisions within the crypto sector. Some investors fear that without a clear regulatory framework, U.S. crypto platforms may struggle to compete globally.