A critical step in the legislative bill aimed at regulating the cryptocurrency market in the US has been postponed.
The Senate Banking Committee canceled a planned markup hearing today on the cryptocurrency market structure bill. The decision comes after Coinbase publicly withdrew its support for the bill yesterday.
Committee Chairman Tim Scott announced late in the day that the bill has been postponed to a later date and no new timeline has been set. Scott stated that discussions are ongoing with the cryptocurrency sector, the financial world, and senators from both parties, adding, “We aim to create a clear framework that protects consumers, strengthens national security, and ensures the future of finance is built in the United States.”
While Coinbase’s last-minute objection attracted attention, rumors circulated that the bill had faced difficulties before. In his interview, Scott stated that he remained optimistic but acknowledged uncertainty about whether the disagreements in the negotiations could be resolved quickly.
One of the most controversial aspects of the bill, allowing stablecoin yield programs, faced intense lobbying from Wall Street banks. The banking sector convinced some senators from both parties by arguing that crypto yield products threaten traditional banking. Therefore, it is reported that Scott is not even sure he has the support of all Republicans in his own party.
Another major point of contention for the Democrats was the need for ethics regulations that would limit high-ranking public officials from profiting personally from the cryptocurrency sector. These proposals were reportedly rejected by Donald Trump’s White House and are seen as specifically targeting the interests of the Trump family. Scott stated that this matter falls under the jurisdiction of the Senate Ethics Committee rather than his own committee.
The cryptocurrency sector has engaged in years of intense lobbying and high campaign spending to reach this stage. The process isn’t entirely over yet: the Senate Agriculture Committee is also expected to consider a similar bill towards the end of the month. However, the Banking Committee has played a leading role in shaping comprehensive crypto regulations in the US.
*This is not investment advice.