Senate Banking Committee Delays Drafting of Key Crypto Bill as Industry Support Disintegrates

The Senate Banking Committee has delayed crafting a bipartisan crypto market structure bill, adding to previous Agriculture Committee delays and increasing uncertainty surrounding the legislation’s timeline.

Senate Banking Committee Chairman Tim Scott issued a decision late Wednesday statement He said he had spoken to leaders in the crypto industry, the financial sector and both parties in Congress, reaffirming that negotiations were continuing “in good faith.”

The bill aims to define regulatory jurisdiction for crypto between the Securities and Exchange Commission and the Commodity Futures Trading Commission, and to establish a federal framework for overseeing digital asset markets.

If passed, it would be the first comprehensive federal statute codifying the structure of the crypto market and replacing reliance on regulatory guidelines and lawsuits. It would also materially reform compliance obligations for exchanges, stablecoin issuers, and DeFi platforms.

The build-up to this point follows “months of serious bipartisan negotiations and real input from innovators, investors and law enforcement,” Scott said.

These efforts, he added, were made “to establish clear rules of the road that protect consumers, strengthen our national security and ensure the future of the U.S. financial industry is built.”

The Banking Committee’s move follows one previous decision by the Senate Agriculture Committee to delay its own increase until the end of January, after that panel said it needed more time to review the legislation before moving forward.

The bill falls under the jurisdiction of both committees because it divides oversight of the crypto markets between the SEC, which reports to the Banking Commission, and the CFTC, which is overseen by the Agriculture Commission.

Together, the overlapping delays mean the bill cannot move forward until both complete their respective increases, pushing the process beyond the timeline lawmakers initially set.

Still, the delays “could create real room to tighten these provisions, because consumer protection depends on due process and limited, clearly defined triggers, not on broad discretion to interrupt access to funds,” Jonathan Inglis, CEO of crypto-focused consumer research firm Protocol Theory, told me. Declutter.

Should the bill ultimately pass, it could be a major boon not only for Bitcoin, but also for the broader crypto market.

Gerry O’Shea, head of global market insights at crypto asset manager Hashdex, said Declutter that the passage of the bill could be a major development for altcoins, which had come under scrutiny under the SEC’s previous leadership.

“That, in my opinion, is probably at least the biggest catalyst for altcoins this year,” O’Shea said of the bill. “Still, at this point I only give it about a 60% chance of success.”

Industry anger

The delays also reflect industry backlash over a series of issues.

Wednesday Coinbase has withdrawn its support for the bill ahead of its previously expected vote in the Senate, citing unresolved concerns about how parts of the legislation could affect developer and user access.

Coinbase argues that the framework, as written, risks creating uncertainty around software operations and undermining the consumer protections that lawmakers wanted to provide.

Concerns about how the bill would expand enforcement and oversight powers have also come into focus.

Earlier this week, Galaxy Research warned that parts of the draft could significantly expand financial audit powers, drawing comparisons to the PATRIOT Act’s post-September 11 expansion of supervisory authorities.

As currently written, the Draft of 278 pages “expands practical enforcement power by spotlighting more of the user-centric crypto experience, especially the interfaces people use every day,” Inglis said.

“Consumers use digital money for speed and clarity, so any framework that extends monitoring and control at the access layer has real trust implications,” Inglis said.

What stands out in the current draft is “the move toward rapid disruption of transactions, including warrantless freezes, backed by liability protections for companies that comply,” he said. “For consumers, the harm is the same whether the friction comes from past delays or from a mishandling.”

Up to 67% of U.S. consumers cite delayed access as a “major frustration,” Inglis said.