The Market Structure Act, expected to bring comprehensive regulation to crypto assets in the US, has been plunged back into uncertainty due to political and industry tensions in the Senate. The Senate Banking Committee indefinitely postponed its work on the bill after cryptocurrency exchange Coinbase withdrew its support from the draft text. According to three sources close to the matter, the committee is not expected to return to work on the crypto market for at least several weeks. The committee had planned to hold a "markup" session last week to discuss and vote on amendments to the bill. However, Coinbase's public withdrawal suspended this plan. According to those closely following the process, Republican senators and the White House want the crypto sector to clarify its disagreements with the banking sector, particularly regarding yield restrictions on stablecoins. It seems difficult for the draft to be brought back to the agenda without resolving this issue.
Coinbase's withdrawal and the housing agenda could delay the CLARITY Act for months
As Bloomberg previously reported, the Senate Banking Committee plans to temporarily step away from the crypto agenda and focus on housing policies. Behind this shift in direction are calls by US President Donald Trump to limit the influence of large institutional investors in the single-family housing market. Trump advocates for individual buyers to have more opportunities in the housing market and points out that rising housing costs have political consequences.
Meanwhile, the Senate Agriculture Committee has released its own draft legislation on cryptocurrency market structure. However, industry representatives believe this text lacks sufficient Democratic support and may be more of a partisan initiative. Agriculture Committee Chairman John Boozman acknowledged that despite discussions with Democratic Senator Cory Booker, there are “significant disagreements on key policy issues.” Boozman argues that the draft should move forward despite the lack of compromise. However, the Senate process is not limited to this. For a text from the Agriculture Committee to be voted on in the Senate floor, it must be aligned with the Banking Committee and must surpass at least 60 votes. This necessitates the support of all Republicans as well as persuading some Democratic senators.
Patrick Witt, Executive Director of the White House Digital Assets Council, responded sharply to the criticism from the industry. In a post on social media platform X, Witt emphasized that the discussion is about "when" the crypto market structure law will be passed, not "whether it will be passed at all." Witt argued that while the current Republican-dominated draft has flaws, a future Democratic version could be more challenging for the industry. The delays are prolonging regulatory uncertainty in the crypto sector. Coinbase CEO Brian Armstrong previously stated that provisions limiting stablecoin returns favor the US banking sector and disadvantage crypto companies. This objection has been a decisive factor in the process's deadlock. However, some sources indicate that it is still possible for the Banking Committee to reconsider the draft by the end of March. In such a scenario, the Senate could vote on the law in the summer, and the House of Representatives could complete the process in the fall. However, the current situation suggests that achieving a clear and comprehensive legal framework for the US crypto market will be difficult, at least in the short term.
