Lawmakers and crypto industry bigwigs have hit an impasse over the crypto market structure bill that had been making its way through the Senate. Now the future of the bill is uncertain as legislators go back to the drawing board.
The initial goal had been to pass the landmark crypto legislation by September 2025. The deadline came and went, prompting a revised target of the end of the year.
Just two weeks into 2026, the Senate has canceled a crucial markup vote to define language and other parameters of the bill. Major industry groups have also withdrawn their support.
With lawmakers and crypto industry representatives still at loggerheads over critical issues within the bill, the timeline for a comprehensive crypto law has stretched even further.
Coinbase withdraws from crypto market structure bill
On Thursday, the US Senate Banking Committee postponed a markup hearing, a crucial opportunity for legislators to debate a bill and discuss possible changes.
Chairman Tim Scott, a Republican senator from South Carolina, said that the break was simply a “brief pause.” He said he’d “spoken with leaders across the crypto industry, the financial sector, and my Democratic and Republican colleagues, and everyone remains at the table working in good faith.”
Scott did not say when the next markup session would be. But the cancellation comes just days after the Senate Agriculture Committee, another group tasked with reviewing the legislation, postponed its own markup session to Jan. 27.
On Tuesday, Scott published a list of “myths” about the bill, refuting claims that the legislation was written by the crypto industry and designed to serve its interests. “The bill has been shaped by years of bipartisan work, extensive engagement with regulators and law enforcement, and a focus on public-interest outcomes,” Republican lawmakers claimed.
Still, just two days later, Coinbase withdrew its support, after which the committee scrapped plans for markup. Coinbase CEO Brian Armstrong said there are “too many issues” with the bill as written, namely:
-
A de facto ban on tokenized equities
-
Prohibitions on decentralized finance (DeFi)
-
Subversion of the Commodity Futures Trading Commission’s (CFTC) authority to the Securities and Exchange Commission (SEC)
-
Bans on stablecoin interest.
Armstrong said that “this version would be materially worse than the current status quo. We’d rather have no bill than a bad bill. Hopefully we can all get to a better draft.”
Coinbase has long been critical of the prohibitions on interest-bearing stablecoins, which it sees as an effort by the banking lobby to protect its business from disruption from the crypto industry.
Related: Banks lobby US Treasury for blanket stablecoin yield ban, Coinbase pushes back
Some observers stressed the importance of keeping a broad range of financial services available to the investing public.
Ji Hun Kim, CEO of blockchain industry advocacy group Crypto Council for Innovation, told Cointelegraph, “It remains critical to preserve consumer choice and ensure any framework supports responsible competition. Clear, workable rules should protect consumers and drive innovation without narrowing the range of financial services available.”
Other crypto executives expressed interest in continued cooperation with lawmakers in Washington. Kraken co-CEO Arjun Sethi said, “Market structure legislation is, by definition, complex. Resolving it was never going to be frictionless. The existence of remaining issues does not mean the effort has failed. It means we are doing the hard work of governing.”
Rulemaking could take years
Even if Congress can get a bill together that the industry approves, its implementation is likely to take a long time.
Justin Slaughter, vice president of regulatory affairs at crypto investment firm Paradigm, said, “There are just a ton of rulemakings in this bill.” He noted 45 separate instances where regulatory agencies would have to issue rules if the bill was passed into law.
The process of implementing this bill will not just run through this presidential term; it will probably run through the entirety of the next one.”
He recalled the Dodd-Frank Wall Street Reform and Consumer Protection Act, the rulemaking on which is still not finished today. “Most of the non-CFTC rules were finished [between] 2013 [and] 2018, three to eight years after passage,” he said.
And that’s assuming that the bill can pass. As written, there are a number of hurdles, Slaughter said. He noted friction over DeFi, which will require further clarification and new definitions. He said there’d be “real issues” with how to launch DeFi protocols, which “definitionally cannot be decentralized on day one.”
He also recalled the absence of anything about quorums for regulatory agencies. Presently, both the SEC and CFTC are run entirely by Republicans. While traditionally the minority party has been represented, some agencies are currently running on skeleton crews of those loyal to the presidential administration.
Related: SEC now all-Republican as crypto rulemaking momentum builds in 2026
Slaughter said that Democrats “won’t sign a bill that doesn’t guarantee that some Democratic commissioners will be able to help implement this bill, nor should they.”
Rachel Lin, CEO and co-founder of crypto trading platform SynFutures, told Cointelegraph that rulemaking after the fact leaves much to be desired. “Clarity needs to come from statute, not just future regulatory guidance, or the industry risks trading one form of uncertainty for another,” she said.
Be it partisan divisions or industry pushback, the Clarity Act is far from complete, and it could be a long time before the industry sees the regulation it wants in Washington.
Magazine: Here’s why crypto is moving to Dubai and Abu Dhabi
Cointelegraph Features and Cointelegraph Magazine publish long-form journalism, analysis and narrative reporting produced by Cointelegraph’s in-house editorial team and selected external contributors with subject-matter expertise. All articles are edited and reviewed by Cointelegraph editors in line with our editorial standards. Contributions from external writers are commissioned for their experience, research or perspective and do not reflect the views of Cointelegraph as a company unless explicitly stated. Content published in Features and Magazine does not constitute financial, legal or investment advice. Readers should conduct their own research and consult qualified professionals where appropriate. Cointelegraph maintains full editorial independence. The selection, commissioning and publication of Features and Magazine content are not influenced by advertisers, partners or commercial relationships.
