Crypto Market Structure Markup Postponed by Senate Banking Committee

At the eleventh hour, Chairman Tim Scott (R-SC) announced his committee would delay a Thursday markup of its landmark crypto bill

Senate Banking Committee Chair Tim Scott (R-SC) | Getty Images

In an anticlimactic end to what was shaping up to be a pivotal week for crypto policy on Capitol Hill, the Senate Banking Committee pulled the plug Wednesday evening on its planned markup of crypto market structure legislation.

The move came after industry frustrations boiled over Wednesday afternoon amid complaints that lawmakers were ceding too much ground to banks and traditional finance, particularly on stablecoin yield and tokenization, following proposed amendments to the 278-page bill, which critics say already favored them. Meanwhile, some Democrats were digging in on ethics provisions for senior government officials, including the president, that would bar them from personally profiting from crypto ventures, despite multiple impasses on the issue with the White House.

The final blow came around 4:00 p.m. when Coinbase CEO Brian Armstrong, a longtime supporter of market structure legislation, announced that the company was withdrawing support, citing “too many issues” with the bill.

“We appreciate all the hard work by members of the Senate to reach a bi-partisan outcome, but this version would be materially worse than the current status quo,” Armstrong wrote in a post on X. “We’d rather have no bill than a bad bill.”

In a follow up post, the CEO noted he was still optimistic that the right outcome could be reached with continued effort and Coinbase would “keep showing up and working with everyone to get there.”

That one of the industry’s most influential policy voices with significant lobbying and spending power on Capitol Hill retracted its support was considered a major setback, sparking immediate concerns that some undecided senators might see it as a signal to vote against the bill and prompt the Banking Committee to pull the markup.

Coinbase CEO Brian Armstrong talks to reporters in the Senate

While the markup was ultimately postponed, the impact of losing Coinbase was eased by a handful of the industry’s leading firms and trade associations publicly reaffirming their support for holding a markup, despite sharing some of Armstrong’s concerns. a16z, Circle, Paradigm, Kraken, Ripple, Coin Center, and the Digital Chamber all issued separate statements in support of moving forward.

“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,” Kraken co-CEO Arjun Sethi said on X.

So what now? In a statement announcing the postponement, Banking Committee Chairman Tim Scott (R-SC) said that “everyone remains at the table working in good faith,” but offered no clues on when the committee might reschedule the markup.

The Senate is out of session next week for Martin Luther King Jr. Day and returns the following week, when the Senate Agriculture Committee is expected to hold its own markup, also postponed from Thursday. It’s unclear whether Banking’s new timeline will affect Ag’s, given that the Banking Committee has taken the lead on many of the core matters the bill aims to address.

The key issues that triggered Wednesday’s fallout will likely remain at the center of ongoing negotiations as lawmakers and industry hit the reset button.

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