A major U.S. Senate push to regulate crypto has stalled after Coinbase withdrew its support for the bill. The move from one of the largest crypto exchanges threatens to derail what was supposed to be landmark legislation.
The Senate Banking Committee canceled a planned markup session as negotiations continue, pushing the bill past its September 2025 target date, according to statements from Chairman Tim Scott.
The bill would set clear rules for digital assets, but deep disagreements have split the industry. Coinbase’s opposition centers on provisions it says would ban certain stablecoin features and restrict decentralized finance—changes the exchange views as a win for the banking lobby, according to an official statement from Coinbase.
The company specifically called out how the bill handles tokenized equities and DeFi restrictions. It also opposes proposed shifts in regulatory authority from the Commodity Futures Trading Commission to the Securities and Exchange Commission.
These changes would fundamentally reshape how crypto markets are overseen and could limit innovation in emerging areas like decentralized finance protocols.
Chairman Scott emphasized that discussions remain active among legislators and industry representatives. But losing support from a major player like Coinbase signals serious trouble ahead for the bill’s passage.
Kraken’s co-CEO acknowledged the complexity of crafting market structure legislation and called for continued dialogue. The comment reflects a broader industry view that comprehensive crypto regulation needs careful deliberation, not a rush job.
Even if the bill eventually passes, implementation could take years. Think of the lengthy rollout of the Dodd-Frank Act after the 2008 financial crisis.
The fights reflect ongoing tensions between fostering innovation and protecting consumers in crypto. Disagreements over DeFi and which agencies should oversee different parts of crypto markets remain major obstacles to finding common ground.
The process underscores the challenge lawmakers face in creating rules for a technology that evolves faster than traditional legislative timelines allow.
