Senate Crypto Regulation Markup Fizzles Over Stablecoin Yield Debate

Getting crypto markets legislation passed in the U.S. is becoming as volatile as crypto markets themselves.

Thursday (Jan. 15) was supposed to be a big day for the digital asset sector. The Senate Banking Committee, which oversees the Securities and Exchange Commission (SEC), and the Senate Agriculture Committee, which oversees the Commodity Futures Trading Commission (CFTC), had set the date for a synchronized markup on two variations of a bill regulating crypto markets in the U.S.

That ended up not happening.

By Wednesday night (Jan. 14), the crypto industry’s legislative momentum had fizzled out over a variety of unresolved issues, raised by both financial services industry groups and crypto groups alike. First, the Agriculture Committee pushed their markup back to the end of the month. Then, the Senate Banking Committee did the same.

The proximate cause was the U.S.-listed crypto exchange Coinbase’s announcement that it “can’t support the bill as written.”

In a statement posted on social media platform X, Coinbase CEO Brian Armstrong said that after reviewing the Senate draft, the company could not endorse it, alleging that some provisions would leave the industry “materially worse than the current status quo.”

That statement resulted in swift procedural pushback, with lawmakers across the aisle signaling that the text would require renegotiation or face further delays.

Still, other firms, including Robinhood’s CEO Vlad Tenev, reaffirmed support for the underlying market-structure bill even as the markup was delayed.

“The White House remains committed to working with Chairman Scott, members of the Senate Banking Committee, and industry stakeholders to pass bipartisan crypto market structure legislation as soon as possible,” said David Sacks, the White House AI and crypto czar, also on X.

For policymakers, the result represented a classic Washington dynamic: the louder the stakeholder chorus, the more challenging it becomes to discern a policy position. In this case, industry opposition to specific provisions has been enough to stall what observers had hoped would be a landmark piece of policy regulating digital asset markets and building on the momentum of the stablecoin-focused GENIUS Act, which was signed into law over the summer.

Read more: Senate Sets Dueling Markups for High-Stakes Crypto Market Regulation

Why Washington’s Most Ambitious Crypto Bill Is Stalling

The friction around the crypto bill is not solely between crypto firms and regulators; it also reflects long-running tensions between the crypto sector and the traditional banking industry.

Banks have increasingly lobbied against crypto offerings that resemble deposit products, especially stablecoin rewards that, in their view, compete against regulated interest accounts. This banking pushback has seeped into the legislative text, prompting provisions aimed at limiting crypto incentives, which were a key flashpoint for Coinbase and other developers of stablecoin-based products.

PYMNTS has previously covered how industry groups such as the American Bankers Association, America’s Credit Unions, the Bank Policy Institute, the Consumer Bankers Association, and others have pressed senators to prohibit any yield-related incentives tied to stablecoin holdings, regardless of the corporate separation.

They have also lobbied the Office of the Comptroller of the Currency and the Federal Reserve to issue guidance discouraging banks from partnering with stablecoin programs that engage in yield-adjacent products. The groups noted that Treasury estimates show $6.6 trillion in deposits could be at risk with such incentives.

The stakes extend beyond stablecoin yield, which was left unaddressed in the GENIUS Act’s text. Issues such as decentralized finance (DeFi) oversight, consumer protection safeguards and infrastructure innovation are all embedded in the crypto market bill’s text and the debates surrounding it.

“We have spent thousands of hours working in good faith to deliver a bill that offers the digital asset industry the clarity it needs to thrive on U.S. soil and solidify America’s leadership in financial innovation for generations to come. Today’s response from some in the industry proves they just are not ready,” said Sen. Cynthia Lummis, R-Wyo. in a statement. Sen. Lummis is the Senate Banking subcommittee chair in charge of digital assets.

Read more: Compliance Is Crypto’s New Cost of Doing Business

What Happens Next for Crypto Market Legislation

For lawmakers, the delay is a double-edged sword. On one hand, it buys time to refine the text and potentially build broader support; on the other hand, it risks losing momentum as midterm election pressures intensify and legislative calendars tighten. Past attempts to corral bipartisan support on crypto regulation have often faltered in precisely this way, with spirited early progress being followed by slowdown as stakeholders push back on specifics.

In practical terms, the current delay likely means that any version of the bill reaching a Senate floor vote will look materially different from the text that Coinbase and others objected to this month. Amendments addressing stablecoin incentives, tokenized assets and enforcement boundaries will be priorities for revision. Whether these adjustments satisfy both industry heavyweights and skeptical legislators remains uncertain.

At its core, the current impasse reveals a fundamental truth about crypto regulation: clarity is not the same as consensus. Policymakers, industry leaders and traditional financial intermediaries all want clear rules. But they diverge sharply on what those rules should prioritize.