U.S. efforts to create clear rules for the crypto industry hit a major roadblock after the Senate Banking Committee abruptly paused work on its long-awaited market structure bill. The move came shortly after Coinbase, one of the industry’s most influential voices, publicly withdrew its support, raising fresh doubts about whether the legislation can move forward anytime soon.
Senate Banking Committee Chairman Tim Scott canceled a planned markup hearing on the bill and did not offer a new date for when lawmakers might return to it. In a statement released late in the day, Scott said discussions are still ongoing with crypto companies, traditional financial institutions, and senators from both parties, but acknowledged that major disagreements remain unresolved.
According to Scott, the goal of the bill is to establish a regulatory framework that protects consumers, strengthens national security, and ensures that financial innovation stays rooted in the United States. However, he admitted there is no guarantee that the current sticking points can be resolved quickly.
The legislation has faced resistance from several directions. One major pressure point comes from Wall Street banks, which have pushed back strongly against provisions that would allow stablecoin issuers to offer yield-generating programs. Banks argue these products could draw deposits away from traditional institutions and disrupt the existing financial system. Their lobbying efforts reportedly persuaded senators from both parties to reconsider their support for the bill.
Political divisions within Congress have also complicated the bill’s path. Scott is said to be unsure whether he can secure backing from all Republican members of the committee, a key requirement for advancing the legislation.
On the Democratic side, lawmakers raised concerns about ethics rules tied to the crypto sector. Some Democrats proposed restrictions that would prevent senior public officials from personally profiting from crypto-related activities. Those proposals were rejected by the White House, according to reports. Scott responded by saying that such ethics matters fall under the authority of the Senate Ethics Committee, not the Banking Committee.
Despite years of lobbying and heavy campaign spending by the crypto industry to push for clearer regulations, the setback highlights how fragile political support remains. Coinbase’s decision to step away from the bill appears to have been a turning point, removing a key source of industry backing at a critical moment.
While the Banking Committee has paused its work, the Senate Agriculture Committee is expected to take up a parallel version of crypto market structure legislation later this month. Even so, the Banking Committee continues to play the lead role in shaping a comprehensive U.S. crypto regulatory framework.
For now, the future of Senate-led crypto reform remains uncertain, with industry support fractured and political tensions slowing progress at a crucial stage.
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