Crypto Bill Delayed as Senate Shifts Focus to Housing

The Senate Banking Committee has indefinitely postponed work on its long-anticipated market structure bill, widely seen as the centerpiece of U.S. crypto regulation. This legislative delay comes after Coinbase, one of the industry's largest exchanges, publicly withdrew its support for the measure.

The withdrawal occurred at a crucial moment before a scheduled markup hearing, where lawmakers would have debated amendments and potentially advanced the bill toward a floor vote. With Coinbase no longer backing the legislation "as written," the committee has shifted its immediate focus to other priorities, including housing affordability initiatives tied to President Donald Trump's agenda.

The crypto market structure bill represents years of effort to establish a comprehensive legal framework for cryptocurrency trading and oversight in the United States. Industry insiders say the delay could stretch into late February or March, according to Bloomberg reporting, as lawmakers wrestle with unresolved policy disputes.

The committee's decision to shelve the legislation came after a significant loss of momentum this week. The bill's progress had been building toward a critical markup hearing, but that process has now been halted indefinitely.

Several factors are contributing to the slowdown:

• Coinbase's withdrawal of support following CEO Brian Armstrong's decision
• Deep divisions between crypto firms and portions of the bill's drafters
• Unresolved policy disputes around stablecoin rewards
• Efforts to rebuild bipartisan consensus in a sharply divided Senate

The withdrawal of Coinbase's support represents a major setback for the legislation, as the exchange is one of the largest and most influential players in the cryptocurrency industry. Industry leaders argue that provisions in the current text could weaken the Commodity Futures Trading Commission's authority, restrict decentralized finance (DeFi), and curtail stablecoin rewards.

These measures are widely viewed as essential to continued crypto innovation, and their potential restriction has sparked significant concern among industry participants. The stablecoin rewards issue appears to be a particular point of contention between crypto firms and the bill's drafters.

At the same time, the traditional banking sector has pushed lawmakers to impose tighter restrictions on yield-bearing crypto products, warning that such features could draw deposits away from banks and destabilize lending markets. That lobbying effort appears to have shaped the bill's language and intensified industry opposition.

Shifting legislative priorities ahead of the midterm elections have further slowed momentum, as senators face pressure to focus on voter-facing issues such as housing affordability. The Senate Banking Committee has pivoted its immediate focus to these housing initiatives tied to President Donald Trump's agenda.

While some lawmakers insist the delay is temporary and that robust crypto rules remain achievable, the interruption highlights the fragile nature of legislative consensus on digital assets. The sharply divided Senate has made bipartisan agreement particularly challenging.

Patrick Witt, executive director of the White House council on digital assets, has publicly urged continued negotiation, describing regulatory clarity as "a question of when, not if."

However, he warned that without industry cooperation, future iterations could be less favorable to crypto firms. This suggests the window for favorable legislation may be narrowing.

While the Banking Committee's bill faces delays, the Senate Agriculture Committee has released a separate market structure draft. However, industry observers caution it may lack the bipartisan backing necessary to prevail, suggesting multiple legislative approaches are struggling to gain traction.

The Commodity Futures Trading Commission remains a central player in the regulatory landscape, with industry leaders concerned that the current bill's provisions could weaken its authority. This tension between different regulatory approaches continues to complicate the legislative process.

The traditional banking sector's influence on the bill's language demonstrates how established financial interests are shaping the regulatory framework for digital assets. This dynamic has created additional friction between crypto firms and lawmakers.

The indefinite postponement of the crypto market structure bill represents a significant setback for an industry seeking regulatory clarity. With the delay potentially extending into late February or March, crypto firms face continued uncertainty about their legal operating environment.

The fragile consensus on digital asset regulation highlights the challenges of creating legislation that balances innovation with consumer protection and financial stability. As lawmakers pivot to housing initiatives and other priorities, the crypto bill's future remains uncertain.

Industry participants and regulators alike will be watching closely to see whether bipartisan consensus can be rebuilt in the coming months. The outcome will likely shape the regulatory landscape for cryptocurrency trading and oversight in the United States for years to come.