Senate Banking Committee delays crypto bill markup after Coinbase withdraws support

Lawmakers abruptly delayed work on a landmark crypto bill as deep rifts emerged between major exchanges, trade groups, and traditional finance interests.

Senate Banking Committee halts markup after last-minute rupture

Senate Banking Committee Chair Tim Scott announced Wednesday evening that he was postponing a long-planned markup of comprehensive digital asset legislation reshaping U.S. market structure rules. The decision arrived just hours after Coinbase told lawmakers it could no longer back the package.

The 278-page proposal had been slated for committee consideration on Thursday, capping months of bipartisan talks aimed at delivering regulatory clarity for crypto and related products. However, the abrupt schedule change underscored how fragile consensus remains around any U.S. cryptocurrency market structure framework.

Scott said in a statement that he had spoken with industry leaders, financial sector executives, and colleagues in both parties. Moreover, he stressed that all sides remain engaged and negotiating in good faith, even as the legislative path forward grows more complicated.

Coinbase flags tokenized equities and DeFi provisions

Industry tensions spiked Wednesday afternoon as revised draft amendments circulated among lobbyists, lawyers, and advocacy groups. Critics warned that the changes would tilt the crypto market structure bill toward big banks and legacy financial institutions at the expense of start-ups and open-source projects.

Concerns focused on new stablecoin yield restrictions and tokenization language that, according to detractors, would curb innovation around blockchain-based assets. In particular, opponents argued the text would make it easier for traditional banks to shut out non-bank competitors offering crypto-linked yield products.

Around 4:00 p.m., Coinbase CEO Brian Armstrong publicly announced the company was withdrawing support. In a post on X, he cited what he called a de facto tokenized equities ban and stringent DeFi regulatory concerns that could give the government expansive access to on-chain and off-chain financial records.

Armstrong also objected to provisions that, in his view, would significantly weaken the Commodity Futures Trading Commission. The amendments risked making the CFTC subordinate to the Securities and Exchange Commission, he argued, upsetting a delicate balance between the two primary U.S. market regulators.

Draft language targeting rewards paid on stablecoins drew some of the harshest criticism. According to Armstrong, those changes would effectively allow banks to tamp down competing yield products, locking in their advantage under the banner of consumer protection.

“We appreciate all the hard work by members of the Senate to reach a bipartisan outcome, but this version would be materially worse than the current status quo,” Armstrong wrote. “We’d rather have no bill than a bad bill.” However, he added that Coinbase remained open to renewed talks to achieve a better legislative outcome.

Other major firms rally behind continuing the process

Coinbase’s break with lawmakers threatened to derail the markup entirely by signaling that industry consensus had collapsed. That said, several other large players moved quickly to reassure senators that they still viewed the process as essential, even if the text remained flawed.

Venture and trading firms including a16z, Paradigm, and Ripple, as well as infrastructure and payments companies like Circle and Kraken, issued statements supporting continued work on the bill. Their messages emphasized that engagement, rather than abandonment, offered the best route to fix problems in the draft.

Trade associations such as Coin Center and the Digital Chamber also backed moving ahead with negotiations. Moreover, they urged senators not to interpret Coinbase’s stance as a reason to retreat from the broader project of crafting a durable U.S. framework for digital assets.

Kraken co-CEO Arjun Sethi underscored that point in a post on X, arguing that real progress requires persistence through difficult bargaining. “It is easy to walk away when a process gets difficult. What is hard and what actually matters is continuing to show up, working through disagreements, and building consensus in a system designed to require it,” he said.

The flurry of endorsements aimed to shore up support among undecided senators who might otherwise view Coinbase withdraws support as a signal that the effort was doomed. However, the divisions laid bare on Wednesday suggested that any final compromise will require more extensive redrafting.

Legislative calendar pressure and next steps for negotiations

In his statement announcing the delay, Scott reiterated that “everyone remains at the table working in good faith.” Yet he offered no clear timeline for when the senate banking committee might reschedule the markup, leaving lobbyists and stakeholders guessing about the next move.

The Senate is set to be out of session next week for Martin Luther King Jr. Day, reducing near-term floor and committee time. At the same time, the Senate Agriculture Committee had already decided to postpone its own related markup, which was also originally scheduled for Thursday.

Whether the Banking Committee’s postponement will cascade into further delays for agriculture-focused digital asset work remains uncertain. However, the same core questions around regulatory turf, bank competition, and decentralized finance oversight are likely to dominate both committees’ discussions when negotiations resume.

As lawmakers and industry leaders return to the table, the fate of the current crypto bill framework will hinge on whether they can reconcile demands for innovation with calls for investor protections and systemic safeguards.

For now, the episode highlights both the urgency and the difficulty of passing U.S. rules for digital assets. The clash over stablecoin yields, tokenization, and agency authority has exposed fault lines that will shape every future attempt to define what is the crypto bill that industry and regulators can ultimately live with.