Coinbase has withdrawn its support for the crypto market structure bill, the CLARITY Act, forcing the Senate Banking Committee to postpone the planned markup.
In a statement, Coinbase CEO Brian Armstrong said the draft, which was scheduled for markup, had “too many issues” and was “bad” for the sector.
He highlighted the ban on tokenized equities, stablecoin rewards, and the prohibition of DeFi that would limit privacy as key deal breakers.
“This version (draft) would be materially worse than the current status quo. We’d rather have no bill than a bad bill. Hopefully, we can all get to a better draft.”
He added that crypto needs to be treated on a “level playing field with the rest of financial services.”
Senate Banking Committee postpones markup
Coinbase’s move reportedly derailed the markup scheduled for the 15th of January. In response, Senate Banking Committee Chairman Tim Scott (R-SC) postponed the session to allow bipartisan negotiations to continue.
Scott added,
“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.”
However, unlike the Senate Agriculture Committee, which also pushed its markup timeline to the last week of January, the Banking Committee didn’t share a new schedule as of press time.
Whether the Banking committee will align with the Agriculture’s schedule was unclear.
Meanwhile, Galaxy Head of Research Alex Thorn noted that Senator Elizabeth Warren filed 35 amendments to the crypto bill. These include stricter DeFi oversight and a proposed ban on tokenized stocks.
Taken together, the changes were largely viewed as a win for the banks, who had successfully pushed for limiting stablecoin rewards in the draft.
Market is 50/50 on the CLARITY Act
These last-minute amendments further diluted the bill, according to crypto supporters. And with the temporary pause on the bill momentum, the market was nearly 50/50 on the chance of it being passed into law this year.
At the time of writing, Polymarket showed a 52% chance of the bill becoming law.
That figure was down from nearly 80% just two days earlier. It reflects growing uncertainty, especially if unresolved issues spill into the U.S. election cycle.
Final Thoughts
- The Senate Banking Committee has joined its Agriculture colleagues in postponing the markup of the crypto market structure bill.
- Coinbase CEO said the industry would “rather have no bill than a bad bill.”
