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.
Micah Zimmerman
Micah first discovered Bitcoin in 2018 but remained a skeptic on the sidelines for too long. Since 2021, he has covered crypto and business and now works as a news reporter for Bitcoin Magazine, based in North Carolina.
