US Senate Banking Cancels Crypto Bill Markup Amid Negotiations

Momentum behind one of the most closely watched U.S. crypto market structure bills has slowed, after Senate leaders opted to pause formal action to continue behind-the-scenes negotiations.

Senate Banking Committee Hits Pause

The US Senate Banking Committee has officially postponed its planned markup of a major crypto regulation bill that had been scheduled for Thursday. The delay was confirmed by committee chairman Tim Scott, who said more time is needed to secure bipartisan support.

In an emailed statement sent late Wednesday from Washington, DC, Scott explained that lawmakers remain engaged but are not yet ready to move forward.

A Bill Meant to Define Crypto Oversight

Scott emphasized that the legislation reflects months of negotiation and input from regulators, investors, innovators, and law enforcement.

The bill is designed to clarify how the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) would divide responsibility for policing the crypto market, a long-standing demand from the industry.

Scott did not provide a new date for the markup, underscoring the uncertainty surrounding the bill’s immediate path forward.

Agriculture Committee Also Delays

The setback follows a similar move by the US Senate Agriculture Committee, which earlier this week delayed its own markup of the bill until January 27. That committee, which oversees the CFTC, had also planned to take up the legislation on Thursday.

Committee chair John Boozman said lawmakers had “made meaningful progress and had constructive discussions” but needed more time to finalize remaining details and ensure broad political backing.

A Procedural Bottleneck

The crypto industry has been watching the bill closely, especially after the House passed its own version, known as the CLARITY Act, in July. However, under Senate rules, both the Banking and Agriculture Committees must advance the legislation before it can reach the full chamber. 

This dual-committee requirement has effectively become a bottleneck, slowing progress even as industry pressure for regulatory clarity continues to build.

Crypto Industry Split on Key Provisions

While many firms support the Senate effort, the latest draft released by the Banking Committee has exposed deep divisions within the crypto sector. A major point of contention is a provision that would limit stablecoin yield payments by third-party platforms, including crypto exchanges. 

Although the GENIUS Act already bars stablecoin issuers from paying yield directly, many exchanges currently offer incentives to users who hold stablecoins. Bank lobbyists have argued that these practices could trigger deposit flight and create a parallel banking system outside traditional oversight.

Coinbase Pulls Support

The most high-profile backlash came from Coinbase, which withdrew its support for the Senate bill earlier this week.

Armstrong warned that the draft creates a “de facto ban” on tokenized equities, imposes onerous restrictions on decentralized finance, and grants the government “unlimited access” to financial records, raising serious privacy concerns.

Support Still Runs Deep

Despite Coinbase’s stance, several influential players remain supportive, including Coin Center, Andreessen Horowitz (a16z), The Digital Chamber, Kraken, and Ripple.

For now, the bill remains in limbo, with negotiations continuing and the outcome still uncertain. What’s clear is that U.S. crypto regulation remains a moving target, shaped as much by political compromise as by industry consensus.