Senate Banking Committee Postpones Crypto Regulation Bill Vote

TLDR

• The US Senate Banking Committee canceled Thursday’s vote on a major crypto regulation bill after Coinbase withdrew its support on Wednesday
• Committee Chairman Tim Scott postponed the markup without setting a new date, citing ongoing bipartisan negotiations
• The bill faced opposition from Wall Street banks over stablecoin reward programs and disagreements about ethics requirements for government officials
• The Senate Agriculture Committee also delayed its related crypto bill markup until January 27
• The legislation aims to establish clear regulatory oversight of the crypto industry by the SEC and CFTC

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The US Senate Banking Committee has canceled its planned Thursday vote on a sweeping crypto regulation bill. The decision came after major crypto exchange Coinbase publicly pulled its support for the legislation on Wednesday.

Committee Chairman Tim Scott announced the postponement late Wednesday. He did not provide a new date for when the markup would be rescheduled. Scott said stakeholders continue to work on the bill in good faith.

The bill seeks to define how federal regulators would oversee the US crypto industry. It would establish clear rules about whether the Securities and Exchange Commission or the Commodity Futures Trading Commission has authority over different crypto activities.

Scott had pushed for a quick process before the vote collapsed. Despite his optimism earlier Wednesday, he expressed uncertainty about resolving key differences among negotiators.

Wall Street Opposition Creates Problems

One major point of contention involves stablecoin reward programs. Wall Street bankers lobbied against allowing crypto yield programs. They convinced lawmakers from both parties that these programs threatened traditional banking.

Scott could not secure full support from his own Republican members. The stablecoin issue divided the committee along unexpected lines.

The bill also struggled with ethics requirements for senior government officials. Democrats wanted restrictions to prevent officials from profiting off the crypto industry. The White House repeatedly rejected these proposals.

Scott told reporters Wednesday that ethics matters fall under the jurisdiction of the Senate ethics committee. His banking panel would not address those concerns in this bill.

Industry Split Over Legislation

The crypto industry itself remains divided over the bill. The Banking Committee released a version Monday that would limit stablecoin payments by third-party platforms like crypto exchanges.

Summer Mersinger, CEO of the Blockchain Association, called the delay a moment of recalibration rather than an endpoint. She said such pauses can be healthy for complex policymaking issues.

The crypto industry has spent years lobbying for clear regulations. Campaign spending from crypto groups reached record levels to support this effort.

The Senate Agriculture Committee also delayed its related crypto bill markup. That committee pushed its vote from Thursday to January 27. Chairman John Boozman said the committee needed to finalize remaining details.

Two Committees Must Pass Bills

Both the Senate Banking and Agriculture Committees must pass their versions of the bill. This is required because they oversee the SEC and CFTC respectively. After both committees pass their bills, the versions would be merged into eventual law.

The House already passed its version of crypto market structure legislation in July. That bill was called the CLARITY Act. Senate procedural rules require both committees to advance separate bills before reconciliation can happen.

The Banking Committee’s work had been leading the US effort to establish crypto regulations. The postponement creates uncertainty about when comprehensive crypto rules might become law.

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