Sacks Says Crypto Market Structure Bill Closer Than Ever After Delay

TLDR

• The U.S. Senate Banking Committee postponed the scheduled markup of the crypto market structure bill.
• Coinbase CEO Brian Armstrong publicly withdrew support for the bill, citing several issues with its provisions.
• Despite the setback, White House advisor David Sacks expressed optimism, stating the legislation remains closer than ever to passing.
• Lawmakers acknowledged the difficulty of advancing the bill without backing from Coinbase, the largest U.S. exchange.
• Senate Banking Committee Chair Tim Scott confirmed that negotiations would continue despite the delay.

The U.S. Senate Banking Committee has canceled the scheduled markup of the crypto market structure bill, delaying progress on legislation aimed at regulating the digital asset industry. The decision, announced late Wednesday, came after Coinbase CEO Brian Armstrong publicly withdrew the company’s support for the bill in its current form. Despite the setback, White House AI and crypto adviser David Sacks remained optimistic, calling the delay an opportunity to resolve remaining industry concerns.

Coinbase’s Break With the Bill Creates Political Shockwaves

Just before the cancellation of the markup, Coinbase announced it could no longer support the bill as it stood. CEO Brian Armstrong criticized the bill for including provisions that could effectively ban tokenized equities, weaken the Commodity Futures Trading Commission’s authority, and eliminate rewards for stablecoins. Armstrong’s withdrawal shifted the bill’s momentum, and lawmakers privately acknowledged the difficulty of advancing the bill without support from the largest U.S. exchange.

Without Coinbase’s backing, the bill’s prospects became uncertain almost immediately. Armstrong expressed his concerns but also emphasized that Coinbase was still open to negotiations. “We’d rather have no bill than a bad bill,” he wrote, while maintaining optimism that a workable solution could be reached with more time. The withdrawal sent shockwaves through the industry and raised doubts about the bill’s chances of passing without key industry support.

Committee Chair Says Negotiations Are Ongoing

Despite the delay, Senate Banking Committee Chair Tim Scott assured that discussions surrounding the bill would continue. He confirmed that the markup would not proceed as scheduled but emphasized that negotiations were ongoing among lawmakers, industry leaders, and other stakeholders. Scott highlighted the bipartisan effort behind the bill, which had been months in the making and had incorporated input from both industry participants and law enforcement.

The debate around the bill has been particularly contentious regarding provisions related to stablecoin rewards. These rewards programs have faced strong opposition from traditional banks, which argue that crypto yield programs pose competitive threats. On the other hand, some Democratic lawmakers pushed for new ethics rules to prevent senior government officials from profiting from crypto holdings. Scott later clarified that these ethics proposals were outside the scope of the Senate Banking Committee’s jurisdiction.

Delay Viewed as a “Recalibration,” Not a Collapse

Industry leaders remain optimistic that the market structure bill can still be successfully passed, despite the delay. Summer Mersinger, CEO of the Blockchain Association, described the postponement as a “moment of recalibration” rather than a collapse. She noted that delays are common in the legislative process, especially when dealing with complex regulatory frameworks.

The Senate Agriculture Committee, which is handling related legislation, has also delayed its markup until later this month. This suggests that there is still room for a reset in the legislative timeline, and both committees are likely to resume discussions soon. As Sacks stated, “Now is the time to set the rules of the road and secure the future of this industry,” signaling a strong resolve among industry leaders to push forward with the legislation despite the recent setbacks.

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