A U.S. Senate Banking Committee markup for the CLARITY Act, originally scheduled for Thursday at 10 a.m. Eastern Time, may be postponed. Bloomberg reporter Steven Dennis said Senator Cynthia Lummis told Bloomberg she had recommended a delay and expected the session to be pushed back, while the final decision rests with Banking Committee Chair Tim Scott.
Coinbase says the current draft is worse than current conditions
The immediate trigger is Coinbase’s decision to withdraw support for the bill. CEO Brian Armstrong said publicly that this version of the CLARITY Act would be “worse than the status quo”, adding that the company would prefer no bill over a bad one. The language was blunt.
Armstrong outlined four main objections. He said the bill would create a de facto ban on tokenized equities, impose broad restrictions on DeFi, grant the government unlimited access to financial records and raise consumer privacy concerns, and weaken the Commodity Futures Trading Commission’s authority over crypto markets while expanding the Securities and Exchange Commission’s reach.
Stablecoin rewards sit at the center of the fight
Stablecoin rewards appear to be one of the biggest pressure points. According to the report, Coinbase generated about $247 million in revenue from stablecoin-related business in the fourth quarter of 2024, while blockchain rewards contributed another $154.8 million. Those figures help explain why the company is pushing back hard on provisions that could limit the economics of stablecoin products.
The proposal could also curb stablecoin reward mechanisms and shield banks from competition, according to the report. Banks are concerned that a 5% risk-free yield could pull deposits out of the traditional system. The U.S. Treasury has estimated that broad stablecoin adoption could draw as much as $6.6 trillion away from banks, a figure that has made limits on stablecoin yields a major lobbying issue in Washington.
Industry reaction is split and the timeline remains uncertain
Reaction across the crypto sector has been mixed. Ripple CEO Brad Garlinghouse struck a more optimistic tone, saying the issues could be addressed during the markup process. ETF analyst James Seyffart took the opposite view, calling Coinbase’s withdrawal of support “problematic” and arguing that the industry needs a market structure bill.
Coinbase Chief Policy Officer Faryar Shirzad said the company’s position is aimed at protecting consumers and reducing barriers to stablecoin adoption. Separately, the Senate Agriculture Committee is still scheduled to hold another markup on January 27, with legislative text expected on January 21. The report also noted that some analysts had previously estimated the bill might not pass until 2027, with implementation not arriving until 2029.