Bitcoin Magazine

Crypto Bill Delayed Several Months as Senate Pivots to Trump’s Housing Initiatives

The sweeping U.S. Senate effort to establish a comprehensive legal framework for cryptocurrency trading and oversight is likely to be pushed back for weeks or even months, after key legislative momentum stalled this week in the wake of major industry backlash.

The Senate Banking Committee indefinitely postponed work on its long-anticipated market structure bill — widely seen as the centerpiece of U.S. crypto regulation — after Coinbase, one of the industry’s largest exchanges, publicly withdrew its support for the measure.

The withdrawal came at a crucial moment before a scheduled markup hearing, where lawmakers would have debated amendments and potentially advanced the bill toward a floor vote. With Coinbase no longer backing the legislation “as written,” the committee has shifted its immediate focus to other priorities, including housing affordability initiatives tied to President Donald Trump’s agenda.

Industry insiders say the delay could stretch into late February or March, according to Bloomberg reporting. Lawmakers wrestled with unresolved policy disputes and are trying to rebuild bipartisan consensus in a sharply divided Senate.

Several factors are contributing to the slowdown. Coinbase’s withdrawal of support, following CEO Brian Armstrong’s decision, shows there are some deep divisions between crypto firms and portions of the bill’s drafters, mainly around stablecoin rewards.

Industry leaders argue that provisions in the current text could weaken the Commodity Futures Trading Commission’s authority, restrict decentralized finance (DeFi), and curtail stablecoin rewards — measures widely viewed as essential to continued crypto innovation. 

Political dynamics are slowing the crypto bill’s progress

At the same time, the traditional banking sector has pushed lawmakers to impose tighter restrictions on yield-bearing crypto products, warning that such features could draw deposits away from banks and destabilize lending markets; that lobbying effort appears to have shaped the bill’s language and intensified industry opposition. 

Also, shifting legislative priorities ahead of the midterm elections have further slowed momentum, as senators face pressure to focus on voter-facing issues such as housing affordability.

While some lawmakers insist the delay is temporary and that robust crypto rules remain achievable, the interruption highlights the fragile nature of legislative consensus on digital assets. 

Senate Agriculture Committee members have released a separate market structure draft, but industry observers caution it may lack the bipartisan backing necessary to prevail.

Patrick Witt, executive director of the White House council on digital assets, has publicly urged continued negotiation, describing regulatory clarity as “a question of when, not if.” However, he warned that without industry cooperation, future iterations could be less favorable to crypto firms.

This post Crypto Bill Delayed Several Months as Senate Pivots to Trump’s Housing Initiatives first appeared on Bitcoin Magazine and is written by Micah Zimmerman.

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Senate Democrats, Crypto Industry to Resume Talks After Market Structure Bill Delay

U.S. Senate Democrats are reportedly set to reopen talks with representatives from the cryptocurrency industry on Friday, according to people familiar with the plan speaking to CoinDesk. 

All this comes less than two days after a last-minute postponement of a key Senate Banking Committee hearing on sweeping digital asset legislation.

The call follows Wednesday night’s abrupt cancellation of the committee’s planned markup of the long-negotiated crypto market structure bill, which had been expected to divide regulatory oversight of digital assets between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). 

The delay came after Coinbase, the largest U.S.-based crypto exchange, withdrew its support for the draft legislation, citing concerns over stablecoin rewards programs and what it viewed as excessive authority granted to the SEC.

Coinbase CEO, Brian Armstrong, said that banks are trying to “kill their competition” with the crypto market structure legislation. “Crypto companies should be allowed to compete and offer loans just like banks,” Armstrong said.

Thursday marked a pause in public activity after the cancellation, but lawmakers and industry participants say negotiations are far from over. 

Democrats from both the Senate Banking Committee and the Senate Agriculture Committee — which oversees the CFTC — are expected to join Friday’s call, along with representatives from crypto policy advocacy groups in Washington, according to reports. 

The Banking Committee had been scheduled to hold an all-day session Thursday to debate amendments and vote on whether to advance the bill. 

That plan unraveled late Wednesday after Coinbase CEO Brian Armstrong said the company could not support the current version of the legislation. Shortly thereafter, Senate Banking Committee Chair Tim Scott, R-S.C., postponed the hearing.

Lummis: Senate is closer than ever

Despite the setback, several lawmakers involved in the negotiations said discussions will continue. In a post on X, Sen. Cynthia Lummis, R-Wyo., a leading crypto advocate in the Senate, said lawmakers were “closer than ever” to reaching agreement.

“Everyone is still at the negotiating table, and I look forward to partnering with [Chairman Scott] to deliver a bipartisan bill the industry — and America — can be proud of,” Lummis wrote Thursday.

Sen. Bill Hagerty, R-Tenn., echoed that optimism, saying he remained “confident” that lawmakers could reach a consensus “in short order.”

“I am fully committed to continuing this important work with my colleagues on market structure and look forward to passing legislation that ensures this innovative technology flourishes in the United States for decades to come,” Hagerty said.

Industry reaction to Coinbase’s withdrawal has been mixed. While Armstrong’s comments intensified scrutiny of the bill, other crypto executives and advocacy groups urged lawmakers to keep pushing forward.

Kraken co-CEO Arjun Sethi said abandoning negotiations now would worsen regulatory uncertainty for U.S. crypto firms. “Walking away now would not preserve the status quo in practice,” Sethi said in a post on X. “It would lock in uncertainty while the rest of the world moves forward.”

A major point of contention in recent negotiations has been whether stablecoin issuers should be permitted to offer rewards or yield programs — an issue that has drawn pushback from bank lobbyists and some Democrats concerned about consumer protection and competition with traditional deposits.

While the Banking Committee’s markup has been postponed, the Senate Agriculture Committee is still expected to hold a hearing on the legislation on January 27, after previously pushing back its own earlier session. Ultimately, both committees’ work would need to be merged before the bill could advance to the full Senate.

Some analysts see the delay as a strategic pause, with Benchmark’s Mark Palmer saying it could help lawmakers build broader bipartisan support and ultimately strengthen what he called a potentially historic overhaul of U.S. financial regulation. 

Others are more doubtful: TD Cowen warned that bridging Democratic demands and Coinbase’s objections may be difficult, especially since some disputed provisions were already concessions to Democrats, while election-year timing and the Senate’s 60-vote threshold add further hurdles. 

This post Senate Democrats, Crypto Industry to Resume Talks After Market Structure Bill Delay first appeared on Bitcoin Magazine and is written by Micah Zimmerman.

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Ahead of Banking Committee Markup, Senate Republicans Release CLARITY Act Fact Sheets

After months of legislative negotiation and industry scrutiny, the Digital Asset Market CLARITY Act is moving toward a critical juncture on Capitol Hill this week as Senate committees align timelines and prepare some key markups that could finally break the deadlock on U.S. crypto regulation. 

The Senate Banking Committee released an amended draft of the CLARITY Act ahead of a scheduled markup and amendment debate, while the Senate Agriculture Committee set its own markup for late January.

Earlier today, Senate Republicans on the Banking, Housing, and Urban Affairs Committee released a series of fact sheets this week detailing the Act. The Senate’s Banking Committee markup is still scheduled for January 15. 

The materials, published ahead of the committee’s markup today, frame the legislation as a comprehensive attempt to bring digital asset markets under a clear federal framework while strengthening investor protections and addressing illicit finance.

Lawmakers backing the bill argue the absence of statutory clarity has pushed activity offshore and left both investors and national security exposed.

Republicans tout consumer protection, security, and clarity in the CLARITY Act

According to the fact sheets, the CLARITY Act would establish enforceable rules distinguishing which digital assets fall under securities law and which qualify as commodities, formally dividing oversight between the Securities and Exchange Commission and the Commodity Futures Trading Commission. 

One section emphasizes consumer protection, stating the bill strengthens disclosure requirements, preserves existing anti-fraud authorities, and limits insider abuse. Digital asset issuers subject to the framework would remain bound by resale restrictions and anti-evasion rules, while fraud would continue to be illegal and fully enforceable by regulators. 

Another focus of the legislation is national security and illicit finance. The fact sheets claim the CLARITY Act contains the strongest illicit-finance framework Congress has considered for digital assets to date. 

Under the proposal, centralized intermediaries would be subject to anti-money-laundering and counter-terrorist financing obligations, strengthened sanctions compliance, and enhanced Treasury authority to respond to high-risk foreign activity. 

Lawmakers say the goal is to close regulatory gaps without driving legitimate activity overseas.

The bill also addresses decentralized finance and software development, an area that has drawn concern from crypto developers. According to the committee materials, the legislation explicitly protects software developers who publish or maintain code without controlling customer funds, and preserves the right to self-custody digital assets. 

Regulatory obligations would instead focus on centralized intermediaries that interact with DeFi protocols, requiring tailored risk-management and cybersecurity standards.

 “Code is protected — misconduct is not,” the fact sheet states.

Supporters further argue the CLARITY Act closes loopholes rather than creating them. The bill establishes a joint SEC-CFTC advisory committee to harmonize regulatory requirements and includes provisions designed to prevent regulatory arbitrage or evasion of U.S. rules. By bringing activity onshore, lawmakers say federal oversight would be strengthened rather than diluted.

Republicans on the committee also pushed back against claims that the bill was written to benefit industry.

The materials describe the legislation as the product of years of bipartisan work, regulator engagement, and consultation with law enforcement, with an emphasis on public-interest outcomes rather than industry preferences.

This post Ahead of Banking Committee Markup, Senate Republicans Release CLARITY Act Fact Sheets first appeared on Bitcoin Magazine and is written by Micah Zimmerman.

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Coinbase May Drop Support for CLARITY Act Over Stablecoin Conflicts

Coinbase, one of the largest U.S.-based crypto exchanges, may withdraw its support for the CLARITY Act if the bill imposes restrictions on stablecoin reward programs, according to a Bloomberg report. 

The warning comes as Congress prepares to mark up the legislation in the Senate this week, setting up a potential clash between regulators and one of crypto’s most prominent companies.

For Coinbase, stablecoin rewards are not a minor perk — they are a core part of its revenue model. The exchange shares in interest income generated from reserves backing USD Coin (USDC), the widely used stablecoin issued by Circle, in which Coinbase owns a minority stake. Part of that income is used to offer incentives to users, including roughly 3.5% rewards for Coinbase One customers. 

These programs encourage users to keep USDC on the platform, creating a predictable revenue stream even when trading activity slows. Bloomberg estimates that stablecoin-related revenue may have reached around $1.3 billion in 2025.

The heart of the debate is whether these rewards resemble traditional banking products, such as interest-bearing accounts, or whether they are consumer incentives that belong in a crypto-specific regulatory framework. 

Some banking groups argue that allowing yield on stablecoins could pull deposits away from traditional banks, potentially reducing lending to households and small businesses. 

The act is expected to be marked up this week on January 15. This ongoing issue could have broad effects on the bitcoin and crypto space. 

Coinbase: Stablecoin rewards are under threat

Coinbase and other crypto advocates counter that treating rewards like bank interest would stifle innovation, make U.S. platforms less competitive globally, and risk pushing users offshore.

Coinbase’s stance illustrates the broader tension between lawmakers seeking investor protection and companies trying to maintain viable business models in the emerging crypto sector. 

While the CLARITY Act aims to clarify market structure rules for digital assets — defining categories like digital commodities, investment contracts, and payment stablecoins— it also signals Congress’s growing interest in stablecoin oversight and decentralized finance.

The timing is significant. The Senate Banking Committee will soon review the bill, and its final provisions could shape the future of U.S. crypto policy. Coinbase’s potential withdrawal of support is somewhat of a negotiation tactic and it reflects how critical stablecoin yield programs have become for regulated exchanges. 

Limiting these incentives could reduce adoption of U.S.-based platforms and slow mainstream engagement with digital currencies.

The dispute also highlights the human element of regulation. Companies like Coinbase are balancing compliance, investor expectations, and global competitiveness, while lawmakers weigh the need for oversight against the risk of stifling innovation.

Coinbase has not made an official statement, but insiders speaking to Bloomberg suggest the exchange is carefully evaluating whether the final text will allow it to continue offering rewards while staying aligned with U.S. law.

This post Coinbase May Drop Support for CLARITY Act Over Stablecoin Conflicts first appeared on Bitcoin Magazine and is written by Micah Zimmerman.

Bitcoin Magazine

Senate Republicans Makes ‘Closing Offer’ on Crypto Market Structure Bill as Tim Scott Pushes Markup

Senate Republicans are reportedly escalating efforts to advance the long-stalled crypto market structure legislation, delivering what they described as a “closing offer” to Democratic negotiators as Banking Committee Chair Tim Scott (R-S.C.) moves toward a committee markup as soon as next week.

Senate Banking Committee Republicans sent a document Monday night outlining a series of proposed changes to the bill ahead of a bipartisan member meeting Tuesday. 

The document, described as a “closing offer and state of play,” includes more than 30 revisions to Title I, which governs the legal classification of digital assets, as well as two new titles focused on investor protections and combating illicit finance, according to POLITICO.

The proposal was sent to Democratic negotiators by Scott and fellow GOP senators Cynthia Lummis (R-Wyo.), Bill Hagerty (R-Tenn.), and Bernie Moreno (R-Ohio).

Lawmakers met in Scott’s office Tuesday morning to review the offer and discuss unresolved issues that were not addressed in the document.

The renewed push comes as Scott prepares to hold a markup on the crypto bill on the legislation next week, per Punchbowl News. 

Senator John Kennedy (R-La.) told Punchbowl that the Senate Banking Committee is targeting Jan. 15 for the markup, though the committee would likely need to release an updated bill draft beforehand.

Crypto law pushback

Democrats have continued to press for concessions that remain major sticking points.

Those include demands for ethics provisions aimed at preventing elected officials — including members of the Trump family — from profiting from crypto businesses, as well as guarantees that Democrats are appointed to leadership roles at the Securities and Exchange Commission and Commodity Futures Trading Commission. 

Lawmakers are also debating whether crypto firms should be allowed to offer yield-bearing products that could compete with traditional banks.

Despite those unresolved issues, momentum appears to be building. Sen. Catherine Cortez Masto (D-Nev.), a moderate Democrat on the Banking Committee involved in negotiations, said she “definitely” expects a markup next week, describing talks as “very productive” and open on both sides, per POLITICO. 

Still, it remains unclear whether a bipartisan deal can be finalized on Scott’s timeline. Lawmakers are facing a compressed legislative calendar, with a Jan. 30 federal spending deadline looming to avert a government shutdown, as well as mounting political pressure ahead of midterm elections.

If Scott proceeds with a markup without Democratic buy-in, it could force negotiators to take public positions on a bill that has yet to bridge deep philosophical divides over regulation, enforcement authority, and decentralized finance. 

This post Senate Republicans Makes ‘Closing Offer’ on Crypto Market Structure Bill as Tim Scott Pushes Markup first appeared on Bitcoin Magazine and is written by Micah Zimmerman.