Senate Cancels Crypto Market Structure Hearing As Coinbase Pulls Support

The Senate Banking Committee has delayed markup of its crypto market structure bill, after crypto exchange Coinbase publicly withdrew its support for the legislation on Wednesday and other rifts in the negotiation which had already put it on a shaking footing.

The delay also follows earlier postponement by the Agricultural Committee and extending uncertainty around the legislation’s timeline.

However, Senate Banking Committee Chair Tim Scott reaffirmed that negotiations would continue in “good faith,” saying that he had conversations with leaders across the crypto industry, the financial sector, and both parties in Congress.

The market structure bill aims at defining how federal regulators oversee the digital-asset markets. Therefore, it defines regulatory jurisdiction for crypto between the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

“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,” Scott said.

If enacted, the bills would become the first comprehensive federal statute offering a clear image to crypto market structure, which would in turn replace reliance on regulatory guidance and litigation.

Moreover, it would also change how exchanges, stablecoin issuers, and DeFi platforms are obliged to comply.

Coinbase Withdraws Support On The Eve Of The Bill’s Markup

With hours to go before the markup vote, Coinbase abruptly pulled its support for the legislation.

In an announcement on X, Coinbase CEO Brian Armstrong announced Wednesday afternoon that the company was pulling its support for the bill in the current state just before its markup on the Senate banking Committee.

“After reviewing the Senate Banking draft text over the last 48 hours, Coinbase unfortunately can’t support the bill as written,” Armstrong said.

The objection by the largest crypto exchange in the US drew the most attention. Coinbase and other crypto space players have been locked in a battle with the banking lobby over a key section in the bill. The section provided for a limited ability of crypto companies to offer yield on stablecoin holdings.

Therefore, the move by Coinbase comes in as a negotiation tactic which could aim at getting more favorable stablecoin yield language.

Even after the delay, Bitcoin’s price rallied in the day to above $96,000 for the first time in 8 weeks, as the crypto space edged up to a $3.35 trillion market capitalization, according to Coingecko data.

Among the top cryptos, BTC surged over 1.5%, as ETH edged down a fraction of a percentage to $3,325. BNB edged up to $938.5, crossing XRP by market capitalization, as the Ripple token dropped 2.3% to trade at $2.1.