Senate Banking Committee Delays Crypto Bill After Coinbase Pulls Its Support
The Senate’s most ambitious attempt yet to write rules for the U.S. crypto market stalled on Wednesday night, after Coinbase, the country’s largest crypto exchange, said it could no longer back the bill and the Senate Banking Committee called off a vote planned for the next morning.
Committee Chairman Tim Scott announced late on January 14 that the panel would postpone its markup of digital asset market structure legislation while bipartisan negotiations continue. In a short statement posted on the Senate Banking Committee website, Scott said everyone “remains at the table working in good faith” and that the aim is still to deliver clear rules for the industry. He did not give a new date.
The delay came only hours after Coinbase chief executive Brian Armstrong said his company “can’t support the bill as written.”
What Coinbase objected to
The committee released a revised draft of more than 270 pages on Monday, January 12, and senators filed well over 70 amendments before Tuesday’s deadline. By Wednesday afternoon, Armstrong had concluded that the text was, in his words, “materially worse than the current status quo.”
“We’d rather have no bill than a bad bill,” Armstrong wrote in a post on X, according to Decrypt.
According to The Block, Armstrong pointed to four areas of concern: how the bill treats tokenized equities, its approach to decentralized finance, provisions he said would “kill rewards on stablecoins,” and the role it would give the Securities and Exchange Commission. Decrypt reported that he described a de facto ban on tokenized stocks and DeFi restrictions that would give the government broad access to users’ financial data.
A source familiar with the decision told The Block that it was “not made lightly,” that some sections of the latest draft were being seen for the first time, including a new section on illicit finance, and that more time for talks with committee members would have helped. The same source described the problems as fixable, but said they need to be resolved before any rescheduled markup.
The fight over stablecoin rewards
At the center of the dispute is a question that the GENIUS Act, the stablecoin law signed in July 2025, left partly open: whether crypto platforms can pay customers rewards for holding dollar stablecoins.
Coinbase earns significant revenue from USDC through its partnership with issuer Circle, and it passes part of that on to users as rewards. Banks argue that interest-like payments on stablecoins could pull deposits out of the traditional banking system, and they have lobbied hard to close what they see as a loophole.
According to Decrypt, the draft released on Monday would ban yield on simple stablecoin holdings while still allowing rewards tied to activity such as payments, remittances and loyalty programs. Decrypt reported that Coinbase had signaled on Tuesday that it could live with that language as long as it did not get tighter. Several amendments queued for the markup, including some with bipartisan backing, would have moved the rules further in the banks’ favor.
Votes were already in doubt
Coinbase was not the only problem facing the bill. The Block reported that the committee did not appear to have the votes it needed before the markup, and that Sen. Ruben Gallego, one of the key Democratic negotiators, said he could not support the bill in its current form. Disagreements over ethics provisions covering officials’ personal crypto holdings have also hung over the talks.
The Senate Agriculture Committee, which shares jurisdiction because its bill covers the Commodity Futures Trading Commission, had already moved its own markup. Chairman John Boozman said on Monday that his panel would push its session from January 15 to the last week of January, citing progress in bipartisan talks but a need for more time, as Decrypt reported.
Reaction across the industry was mixed. Ripple chief executive Brad Garlinghouse said his company was still at the table and that he remained “optimistic that issues can be resolved through the mark-up process,” according to The Block. Other industry groups publicly stood by the committee’s work after Armstrong’s post. One Washington insider quoted by Decrypt read Coinbase’s move as a negotiating tactic aimed at winning better stablecoin terms, while a policy expert called it “farcically inept and entitled” and predicted it could sink the bill.
Why it matters for crypto users
The market structure bill is meant to settle the long-running question of which U.S. regulator oversees which digital assets, how exchanges and brokers register, and where decentralized protocols fit. For years, the absence of such rules has pushed disputes into enforcement actions and courtrooms. The House passed its own version last year, so a Senate bill is the missing piece before any law can reach the president’s desk.
Wednesday’s events show how fragile that process remains. The industry’s single most politically active company has now said publicly that it prefers the status quo to the current draft, and that position carries weight: Decrypt noted that a Coinbase-backed super PAC has raised more than $116 million ahead of the 2026 midterm elections, and Armstrong warned that a Coinbase-aligned watchdog would track how senators vote.
For everyday users, the most concrete stakes are in the stablecoin language. If the bank-friendly version prevails, the rewards many exchanges offer on stablecoin balances could shrink or be restructured around spending and other activity. If the industry wins, those programs could continue largely as they are, with banks likely to keep pressing their case.
No new markup date has been set. With the Agriculture Committee now aiming for late January, and Congress facing a crowded calendar in an election year, the coming weeks will show whether Wednesday was a pause in negotiations or the start of a longer delay.