A key U.S. Senate committee delayed debate on a long awaited crypto market structure bill on Thursday, hours after the chief executive of Coinbase said the company could not support the legislation in its current form. The postponement has injected new uncertainty into efforts to establish a comprehensive regulatory framework for digital assets in the United States. The bill, introduced earlier this week by the Senate Banking Committee, was expected to clarify when crypto tokens are treated as securities, commodities, or fall under alternative classifications, as well as define regulatory oversight between agencies.
Coinbase chief executive Brian Armstrong said the proposal contained multiple provisions that could harm the industry, including limits on stablecoin rewards and changes to the role of the Commodity Futures Trading Commission. In public comments, Armstrong argued that the bill would weaken the CFTC’s authority and restrict crypto firms’ ability to offer incentives tied to dollar pegged tokens. While emphasizing that Coinbase supports clear regulation, he said the company would prefer no legislation over rules that could slow innovation or undermine competitiveness.
The Senate Banking Committee had been scheduled to consider amendments to the bill, often referred to as the Clarity Act, but canceled the markup late Wednesday. Committee leadership did not immediately confirm whether Coinbase’s objections directly prompted the delay. The bill faces a narrow path forward, requiring support from a significant number of Democrats in the full Senate. Some lawmakers have raised concerns that the proposal lacks safeguards to prevent political officials from profiting from crypto related ventures, adding to the complexity of negotiations.
The legislation is the product of years of lobbying by major crypto firms seeking legal certainty after regulators under the previous administration argued that many companies were violating existing securities laws. Banks have also weighed in, warning that aspects of stablecoin legislation could encourage deposit outflows if crypto platforms are allowed to offer yield like incentives. The Senate bill attempts to address this by banning direct interest payments on stablecoins while permitting certain rewards tied to activity, a compromise that has drawn criticism from both banks and parts of the crypto industry.
The delay underscores deep divisions over how to regulate digital assets as they move closer to the financial mainstream. Industry groups said the pause could allow lawmakers more time to refine the framework and address concerns from multiple stakeholders. For now, the setback highlights how fragile consensus remains around crypto regulation, even as pressure builds to provide clearer rules for markets, consumers, and financial institutions.
