U.S. Crypto Legislation Faces New Obstacles: Hearing May Be Delayed, Coinbase Withdraws Support Triggering Internal Disputes

A key battle in US cryptocurrency legislation suddenly faces unexpected developments. The Senate Banking Committee hearing originally scheduled for this Thursday risks being postponed due to fierce disagreements between bipartisan lawmakers, especially over the stablecoin yield provisions.

At this tense moment, Coinbase, the largest US CEX, withdrew its support for the bill draft, with CEO Brian Armstrong bluntly stating, “We’d rather have no bill than a bad bill,” further increasing legislative uncertainty. These events indicate that the “Digital Asset Market Clarity Act,” aimed at providing a clear regulatory framework for the US crypto market, is now entangled in complex struggles involving partisan politics, industry conflicts, and traditional financial forces. The final fate of the bill not only impacts whether the US can maintain its leadership in digital financial innovation but also has profound implications for the global crypto regulatory landscape.

Legislative Deadlock and Key Hearing Potentially Delayed

The atmosphere in Washington is thick with familiar tension. The Senate Banking Committee’s critical “markup session” scheduled for this Thursday is now hanging in the balance. During this session, members planned to debate, amend, and vote on the long-anticipated “Digital Asset Market Clarity Act” draft, deciding whether to advance it to the full Senate. However, according to one of the bill’s main advocates, Wyoming Republican Senator Cynthia Lummis, Bloomberg reports that the hearing “may be postponed again.”

The postponement is not due to external pressure but stems from internal disagreements within the committee. Although Lummis emphasized that bipartisan language is ready and called on Democratic colleagues “not to retreat from the progress made,” several Republican senators, including Thom Tillis, have expressed objections to multiple provisions in the draft. Among the most contentious issues is the language regarding whether stablecoins can offer yields to holders. This “yield” typically refers to interest generated through staking or lending protocols, which traditional banks see as a direct threat to their deposit business, while the crypto industry views as a fundamental financial innovation and user right.

Lummis’s spokesperson did not comment immediately, and Senate Banking Committee Chair Tim Scott’s office remained silent—silence often signals legislative gridlock. It’s important to note this isn’t the first delay for the bill. Previously, a scheduled hearing on January 15 was postponed to the end of January, citing “the need for more time to garner broad bipartisan support.” Now, just before the scheduled date, news of another delay casts a heavy shadow over the bill’s prospects. In Washington, delays often mean brewing opposition and eroding consensus.

Crypto Market Structure Bill Timeline and Core Disputes

• Original hearing date: Mid-January 2026 (Thursday)
• Latest update: Senator Lummis hints at possible further postponement
• Previous delay: From January 15 to late January
• Main resistance sources:
  • Party internal disagreements: Some Republicans oppose certain draft provisions.
  • Key contentious clause: Legality and regulation of “stablecoin yields.”
  • Industry support divided: Coinbase and other key companies withdraw support.
  • Traditional financial opposition: Over 3,200 banks jointly petition to ban stablecoin yields.
• Votes needed for passage: 60 votes in the Senate (must secure some Democratic support)
• Key advocates: Senator Cynthia Lummis ®, Senate Banking Committee Chair Tim Scott ®
• Involved committees: Senate Banking Committee (lead), coordination with Senate Agriculture Committee (for some commodity definitions).

Coinbase “Rebels” at the Last Moment, Armstrong Declares “Better No Bill Than a Bad One”

While lawmakers are behind closed doors negotiating, a dramatic scene unfolds in the front stage of the crypto industry. Coinbase, a flagship US crypto company and key player in lobbying efforts, announced on social media Wednesday evening that it withdraws support for the bill draft. This move is akin to a shockwave at a critical legislative juncture.

Armstrong’s words are unusually direct and stern. He states that the draft version released Monday night contains “too many issues,” and passing it would “make things worse than the current situation.” He lists concerns including: the draft could effectively ban tokenized securities, impose unrealistic regulations on DeFi, have flaws in the role assigned to the CFTC, and some of the over 75 proposed amendments are worrisome. “We’d rather have no bill than a bad bill.” Armstrong’s statement quickly becomes a focal point for industry and public discussion.

This shift in stance is significant. As a publicly traded company seeking constructive relations with regulators, Coinbase has been a major proponent of legislation in Congress. Its “withdrawal” sends two key signals: first, the current draft may indeed touch on core red lines for the crypto industry—especially regarding DeFi and yield generation; second, industry interests and demands are not monolithic, and different segments may have conflicting views on what constitutes a “good bill.” Although Armstrong added he is “optimistic about reaching the right outcome through continued effort” and that the company will stay engaged in negotiations, withdrawing support at this stage undoubtedly weakens the narrative of broad industry backing and gives opponents more ammunition.

“Stablecoin Yield” Becomes the Focal Point of the Storm, Traditional Banks vs. Crypto Innovation

Why does a bill aimed at providing “clarity” trigger such a storm? Ultimately, all conflicts boil down to a highly technical but crucial issue: Can and how should stablecoins offer yields to their holders? This seemingly minor product feature is actually a direct confrontation between traditional finance and crypto financial paradigms.

Traditional financial powers, represented by the US Bankers Association, launched a fierce attack. They submitted a petition signed by over 3,200 banks demanding a ban on any form of stablecoin yields or rewards. Their argument is rooted in the survival logic of traditional banking: stablecoin yields will attract deposits away from banks into crypto. They claim, “Unlike banks that invest deposits directly into community loans (auto, agricultural, mortgage), crypto firms offering stablecoin rewards will siphon off trillions of dollars from local lending, reducing funds available for local economic growth.” This is a classic lobbying tactic positioning crypto as an adversary to community development and national economy.

From the crypto industry’s perspective, it’s a different story. Stablecoin yields usually do not come from interest rate spreads but are generated by staking, providing liquidity, or participating in tokenized debt protocols—leveraging blockchain and smart contracts to create new capital efficiency and wealth creation models. Restricting or banning such yields would be akin to stifling innovation and putting US users at a disadvantage in global competition. Coinbase has long regarded protecting crypto yields as a “red line” in negotiations, and Armstrong’s withdrawal statement directly reflects this. Committee Chair Scott acknowledged that new language on yields is circulating among lawmakers and stakeholders, and he hopes for a final consensus, but it’s clear no agreement has yet been reached.

Industry Reactions Diverge: From Ripple’s Praise to Lobbies’ Cautious Watch

Coinbase’s “solo act” is not representative of the entire crypto industry; rather, it reveals internal differences in legislative strategy and interests. Almost simultaneously with Armstrong’s statement, Ripple CEO Brad Garlinghouse expressed praise for the bill, calling it “a significant step forward in providing a workable crypto framework while continuing to protect consumers,” emphasizing “clarity over chaos, and the success of this bill is the success of crypto.” As a company with a long legal history with regulators, Ripple’s desire for “regulatory clarity” may be more urgent than others.

Major crypto lobbying groups adopt a more cautious and pragmatic stance. The Digital Chamber of Commerce issued a statement saying that while the Senate Banking Committee draft is “a work in progress,” they are actively pushing for targeted improvements and amendments. “Regardless of tomorrow’s markup outcome, we will continue to participate at every step to help shape a final bill that works for our members, innovators, and American consumers.” This aims to balance support for legislation with advocacy for industry interests. Another major group, the Blockchain Association, said they are discussing Coinbase’s position and have not yet decided on next steps.

Such divergence is understandable. Different crypto firms, based on their business models, regulatory pressures, and long-term strategies, naturally focus on different aspects of the bill. For example, a DeFi protocol developer and a mainstream CEX focused on spot trading will have very different sensitivities to “decentralized finance regulation.” These internal disagreements, while weakening the industry’s collective bargaining power, also reflect market maturity—crypto is no longer a monolith, and internal competition and cooperation coexist. Lawmakers must navigate and reconcile this diverse and dynamic landscape of interests.

A Strategic Battle Over America’s Innovation Leadership

Overall, the fate of this crypto market structure bill transcends mere legal language; it has become a strategic contest over whether the US can maintain its leadership in future digital finance. Its passage would send a clear signal: the US is committed to establishing an inclusive, orderly crypto asset regulatory framework, integrating innovation into mainstream finance to attract global talent and capital. Conversely, if the bill stalls due to internal conflicts or results in a heavily restrictive “bad bill,” it could mean the US cedes its pioneering role to the EU, UK, or Asian jurisdictions.

Politically, the challenge is structural. It must first gain consensus within the Republican-controlled Senate Banking Committee, then secure enough Democratic support to reach the 60-vote threshold in the full Senate. Meanwhile, longstanding Democratic concerns—such as whether former President Trump and his family profited from crypto—must also be addressed in the bill’s ethical provisions. Chairman Scott admits that recent negotiations have been “lively,” with “passionate” debates. This “passion” is both a driving force and a potential obstacle to consensus.

For the crypto market, short-term uncertainty may suppress risk appetite. Legislative delays and repeated postponements mean the “clarity” that markets crave will continue to be delayed. However, in the medium to long term, a positive and well-crafted legislative outcome could bring systemic benefits, attracting institutional capital and fostering a healthier environment for innovation. Investors should closely watch whether the hearings proceed as scheduled, whether Coinbase and other key players reach new compromises with lawmakers, and the specific language in the final bill on stablecoin yields, DeFi regulation, and other core issues. Regardless of the outcome, this legislative tug-of-war in Washington clearly demonstrates that cryptocurrency has become an indisputable part of the national political and economic agenda. Its path toward compliance and mainstream acceptance may be bumpy, but the direction is now irreversible.