Senate Delays Crypto Market Structure To Secure Bipartisan Support
Crypto journalist
Anas Hasan
Crypto journalist
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Senate Agriculture Committee Chairman John Boozman has extended the proposed bipartisan crypto legislation until the end of January, citing the need for more time to finalize policy details and ensure broad congressional support.
The delay follows negotiations over the weekend with Democratic leader Senator Cory Booker on the Digital Asset Market Transparency Act, which would divide regulatory authority between the SEC and CFTC, establishing frameworks for stablecoin products, defiance protections and digital asset classification.
In the year The extension adds uncertainty to a law already facing political headwinds as the 2026 midterm elections approach. Some analysts say it could slip to 2027, despite strong support from the Trump administration and newly appointed SEC Chairman Paul Atkins.
Banks will resolve the supply of Stablecoin products in the final negotiations
Traditional banking groups have stepped up lobbying efforts to limit stablecoin rewards beyond the GENIUS Act framework, which allows third-party platforms to offer incentives that prevent direct interest payments from issuers.
The latest Senate Banking Committee draft, released late Monday after what sources described as a “doozy” of the day, would bar companies from paying interest just for keeping accounts, but would allow rewards related to account opening, transaction activity, inventory, cash flow provision, bond funding or management involvement.
In a recent letter, the American Bankers Association warned that “if billions are displaced from community bank lending, small businesses, farmers, students and homebuyers in cities like ours will be hurt.”
As a result, Senate negotiators threatened to withdraw support for Coinbase if they introduced restrictions beyond the revised disclosure requirements. “Weakening the hegemony of the US dollar has been a long-term goal of the PRC – the Senate's suspension of awards will be a big help to China's efforts,” said policy officer Faryar Shirzad, who announced on January 16 that Beijing plans to pay interest on the digital yuan.
Stablecoin rewards represent a significant source of income for Coinbase, which shares interest income from USDC reserves with Circle Internet Group and offers a 3.5% yield on Coinbase One balances, with Bloomberg forecasting the exchange's total stablecoin revenue to reach $1.3 billion by 2025.
Jake Chervinsky of Variant Fund questioned yield restrictions, saying, “There are few things left that can disrupt market structure calculations, and stable coin yields are one of them.”
The legislative timeline is under pressure from the midterm elections.
Three Democratic senators, Chris Van Hollen, Tina Smith and Jack Reed, sent a letter to Banking Committee leadership demanding a full hearing before Thursday, criticizing the lack of writing, saying the timeline “is not enough to vote on ‘the most important legislation the committee has seen this century' with two days to go.”
The lawmakers said neither the full committee nor the public had seen any text before Thursday's 10 a.m. vote that would affect 68 million U.S. crypto holders and the $3 trillion digital asset market.
With growing bipartisan opposition and pressure from bankers, TD Cowen has warned that the 2026 midterms could be delayed until 2027, with Senate Democrats likely to block support for lawmakers in place for the next cycle.
Bloomberg Intelligence analyst Nathan Dean said a lack of bipartisan support could push the first half's chances of passage below 70%, while full implementation could be delayed until 2029, depending on election results that shift control of Congress.
Specifically, the new law includes an “ETF safe harbor” that will treat major altcoins listed on national securities exchanges alongside BTC and ETH as of January 1, classifying the tokens as unsafe.
Congressman Bill Hughes said the bill would “protect non-security commercial interfaces” by creating regulatory environments based on protection and control based on interface popularity, saying “if users trade with their own keys, you're software” and “if users trade with their own keys, you're software.”
SEC Chairman Paul Atkins expressed his full support for Congress's action, saying, “Passing the Bilateral Market Structure Act will help future-proof us against abusive regulators, helping us achieve President Trump's goal of making the United States the world's crypto capital.”
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