The U.S. Senate Banking Committee will no longer be marking up its crypto market structure bill Thursday, after crypto exchange Coinbase publicly withdrew its support for the legislation on Wednesday and other rifts in the negotiation had already put it on unsteady footing.
The market structure bill, aimed at defining how federal regulators oversee the U.S. crypto industry, was postponed late Wednesday and a new date was not set, according to a statement from committee Chairman Tim Scott.
"I’ve 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 said in a statement. "This bill reflects months of serious bipartisan negotiations and real input from innovators, investors, and law enforcement. The goal is to deliver clear rules of the road that protect consumers, strengthen our national security, and ensure the future of finance is built in the United States."
Though Coinbase's objection on the eve of the bill's markup hearing drew the most attention, a number of other headwinds had already likely knocked the effort off course. Scott had been optimistic in a Wednesday interview with CoinDesk, but he also expressed uncertainty that the many differences among negotiators could be ironed out before the committee was supposed to meet.
On one of the bill's central and most controversial points — the allowance of stablecoin rewards programs — Wall Street bankers had continued to lobby vigorously against crypto yield and convinced a number of lawmakers from both parties that traditional banking was under threat. People familiar with the talks had said that Scott couldn't even count on a full slate of his own Republicans to back the bill as a result.
And on another major sticking point for Democratic lawmakers, the talks hadn't figured out an approach to ethics requirements that would restrict senior government officials from personally profiting off of the crypto industry. At every turn, President Donald Trump's White House was said to turn away those proposals, which targeted his own family's interests. On Wednesday, Scott told CoinDesk that it was determined that the matter was more properly under the jurisdiction of the Senate's ethics committee rather than his own banking panel.
The crypto industry has expended years of lobbying and a mountain of campaign spending to reach this point. The Senate Agriculture Committee, which also has to pass a related bill before the two can be merged into an eventual law, had already delayed its own markup until the end of the month, so the process may still have life. But the Banking Committee's work has been the leading edge of the U.S. effort to finally establish crypto regulations.