Talks Resume After Last-Minute Postponement
According to sources familiar with the plan, U.S. Senate Democrats are scheduled to reopen discussions with representatives from the cryptocurrency industry on Friday. This comes less than two days after the abrupt cancellation of a Senate Banking Committee hearing on the comprehensive digital asset legislation, known as the market structure bill. The bill was expected to clarify the regulatory oversight of digital assets between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
Why Was the Hearing Postponed?
The postponement occurred late Wednesday night after Coinbase, the largest U.S.-based crypto exchange, withdrew its support for the draft legislation. Coinbase CEO Brian Armstrong stated that banks are trying to "kill their competition" with the crypto market structure bill, adding that "crypto companies should be allowed to compete and offer loans just like banks." A key point of contention has been whether stablecoin issuers should be permitted to offer rewards or yield programs, which has drawn pushback from bank lobbyists and some Democrats concerned about consumer protection and competition with traditional deposits. The Banking Committee had been scheduled to hold an all-day session Thursday to debate amendments and vote on advancing the bill, but Chair Tim Scott (R-S.C.) postponed it after Armstrong's announcement.
Lummis: Senate is Closer Than Ever
Despite the setback, several lawmakers involved in the negotiations reaffirmed their commitment to continuing discussions. Sen. Cynthia Lummis (R-Wyo.), a leading crypto advocate, posted on X that lawmakers are "closer than ever" to an 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. Sen. Bill Hagerty (R-Tenn.) echoed optimism, saying he remained "confident" that lawmakers could reach a consensus "in short order" and pledged to continue working on the legislation.
Industry Reactions: Mixed but Determined
Industry reaction to Coinbase’s withdrawal has been mixed. Kraken co-CEO Arjun Sethi urged lawmakers not to abandon negotiations, warning that "walking away now would lock in uncertainty while the rest of the world moves forward." Other executives and advocacy groups pushed for continued dialogue. Benchmark analyst Mark Palmer viewed the delay as a strategic pause that could help build broader bipartisan support for what he called a potentially historic overhaul of U.S. financial regulation. Meanwhile, TD Cowen cautioned that bridging Democratic demands and Coinbase’s objections may be difficult, especially since some disputed provisions were already concessions to Democrats. Additionally, the election-year timing and the Senate’s 60-vote threshold add further hurdles.
Next Steps: Agriculture Committee Hearing Still Set for January 27
The Senate Agriculture Committee, which oversees the CFTC, still plans to hold a hearing on the legislation on January 27, after previously postponing its own earlier session. Ultimately, work from both committees must be merged before the bill can advance to the full Senate. Lawmakers and industry participants say negotiations are far from over, and the coming weeks will be critical for potential progress on the crypto market structure bill.