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Senate Delays Crypto Market Structure Bill to Secure Bipartisan Support

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Senate Agriculture Committee Chairman John Boozman postponed a deliberate markup of bipartisan crypto laws to late January, citing the necessity for added time to finalize remaining coverage particulars and guarantee broad congressional help.

The delay follows weekend negotiations with Democratic lead Senator Cory Booker on the Digital Asset Market Clarity Act, which divides regulatory authority between the SEC and CFTC whereas establishing frameworks for stablecoin yields, DeFi protections, and digital asset classifications.

The postponement provides uncertainty to laws already dealing with political headwinds because the 2026 midterm elections strategy, with some analysts warning passage may slip to 2027 regardless of sturdy backing from the Trump administration and newly appointed SEC Chair Paul Atkins, who called this “an enormous week for crypto” whereas urging Congress to carry digital asset markets “out of the regulatory grey zone.“

Banks Challenge Stablecoin Yield Provisions in Final Negotiations

Traditional banking teams intensified lobbying efforts to limit stablecoin rewards past the GENIUS Act’s framework, which allows third-party platforms to supply incentives whereas barring direct curiosity funds from issuers.

The newest Senate Banking Committee draft, released late Monday after what sources described as a “doozy” of a day, prohibits corporations from paying curiosity solely for holding balances however permits rewards tied to account opening, transaction exercise, staking, liquidity provision, collateral deposits, or governance participation.

The American Bankers Association warned in a recent letter that “if billions are displaced from group financial institution lending, small companies, farmers, college students, and residential patrons in cities like ours will endure,” arguing that crypto exchanges can not replicate FDIC-insured merchandise or fill lending gaps from deposit outflows.

As a consequence, Coinbase threatened to withdraw support if Senate negotiators insert restrictions past enhanced disclosure necessities, with Chief Policy Officer Faryar Shirzad contending that “undermining the supremacy of the USD has been a longstanding aim of the PRC—the Senate banning rewards can be an enormous help to China’s efforts,” noting Beijing introduced plans to pay curiosity on its digital yuan beginning January 1, 2026.

Stablecoin rewards symbolize important income for Coinbase, which shares curiosity revenue from USDC reserves with Circle Internet Group and provides 3.5% yields on Coinbase One balances, with Bloomberg projecting the change’s complete stablecoin income reached $1.3 billion in 2025.

Jake Chervinsky of Variant Fund questioned the yield restrictions, stating, “there are some things left that might blow up the market construction invoice, and stablecoin yield is considered one of them,” including, “what does stablecoin yield have to do with market construction, you ask? Good query! NOTHING. Except the banks have affect and so they need their regulatory moat again.“

Legislative Timeline Faces Midterm Election Pressure

Three Democratic senators, Chris Van Hollen, Tina Smith, and Jack Reed, sent a letter to Banking Committee management demanding a full listening to earlier than Thursday’s markup, criticizing the dearth of textual content “simply two days earlier than the markup, calling the timeline insufficient for voting on ‘essentially the most important legislation thought of by the committee this century.’“

The lawmakers famous that neither the complete committee nor the general public had seen any textual content resembling the laws affecting 68 million American crypto homeowners and the $3 trillion digital asset market by 6 p.m. Monday, forward of the ten a.m. Thursday vote.

Due to rising bipartisan opposition and strain from bankers, TD Cowen warned that the 2026 midterms may delay passage till 2027, with Senate Democrats probably withholding help as lawmakers place for the following cycle.

Bloomberg Intelligence analyst Nathan Dean even instructed the markup’s lack of bipartisan help might push odds of first-half passage under 70%, whereas full implementation may lengthen to 2029 relying on election outcomes that reshape congressional management.

Notably, the brand new laws consists of an “ETF secure harbor” robotically classifying tokens as non-securities in the event that they had been principal belongings of exchange-traded merchandise listed on nationwide securities exchanges as of January 1, treating main altcoins identically to BTC and ETH from day one.

Bill Hughes of Consensys additionally noted the invoice “actually does defend non-custodial buying and selling interfaces” by creating regulatory perimeters based mostly on custody and management reasonably than interface recognition, stating “if customers commerce by their very own keys, you’re software program” versus “if customers commerce by their very own keys, you’re software program.“

SEC Chair Paul Atkins expressed full help for congressional motion, writing, “passing bipartisan market construction laws will assist us future-proof towards rogue regulators, guaranteeing that we obtain President Trump’s aim to make the U.S. the crypto capital of the world,” whereas anticipating the president would signal laws “within the coming months.“

The put up Senate Delays Crypto Market Structure Bill to Secure Bipartisan Support appeared first on Cryptonews.

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