The Senate Banking Committee’s crypto bill unraveled in real time this week after Coinbase CEO Brian Armstrong went public with a scathing rejection of the draft, prompting lawmakers to halt a scheduled markup and exposing deep fractures between Washington and the crypto industry.
In a move that screams “back to the drawing board,” the Senate Banking Committee has abruptly pulled the plug on Thursday’s planned markup of the landmark crypto market-structure bill. The delay comes just hours after Coinbase CEO Brian Armstrong publicly torched the latest draft, declaring his exchange “can’t support the bill as written” and throwing a major wrench in the bipartisan push for regulatory clarity.
The markup, a critical step where lawmakers debate and amend legislation, was postponed indefinitely, Committee Chairman Tim Scott confirmed late Wednesday. In a statement cited by Bloomberg, Scott tried to project unity, saying, “everyone remains at the table working in good faith,” with the goal of delivering rules that “ensure the future of finance is built in the United States.”
But the industry’s most powerful player just walked away from the table.
Coinbase Draws a Hard Line on Tokenization, DeFi, and Stablecoins
Armstrong’s takedown of the bill on X was brutal and direct, citing a laundry list of deal-breakers that have the crypto community fuming. He flagged a “de facto ban on tokenized equities,” aggressive “DeFi prohibitions” that would nuke user privacy, and a power grab that would make the CFTC subservient to the SEC. The final straw for many, however, were the draft amendments that would “kill rewards on stablecoins.”
That last point is the real battleground. Stablecoin rewards are a core yield engine of DeFi, letting degens farm yield on their stable stacks while providing crucial liquidity for the ecosystem. The traditional banking sector, viewing this as an existential threat to their deposit base, has been lobbying hard to kill it. The Senate draft appears to have caved to that pressure, a move Coinbase can’t stomach as it directly impacts a key revenue stream.
The industry’s swift rejection of the compromise text wasn’t lost on lawmakers. Senator Cynthia Lummis, a key crypto advocate on the committee, posted on X that the industry response “proves they just are not ready.”
“While I am deeply disappointed, I am committed to taking this feedback and partnering with the industry to deliver a product that helps them thrive,” added Lummis.
Armstrong quickly replied with a simple “Agreed, and thank you!”
Agreed, and thank you!
— Brian Armstrong (@brian_armstrong) January 15, 2026
This sudden stall is a significant setback for a bill that many hoped would finally provide a clear regulatory framework and shield the industry from the kind of regulation-by-enforcement seen under the Biden administration. The House passed its own version of the bill last year, but now the Senate’s process is fractured. Both the Banking and Agriculture Committees need to pass their own versions before they can be merged and reconciled with the House text—a tall order with midterm elections looming.
Industry Unity Fractures as Political Stakes Rise
Adding another layer of intrigue, Coinbase’s hardline stance appears to be fracturing the very industry coalition it helped build. As Coinbase navigates the bill’s negotiations, the exchange has also made a point of emphasizing its influence over an enormous super PAC network—one that has already amassed over $116 million to spend on the 2026 midterm elections. But even the backers of that initiative appear to be splintering over Coinbase’s approach to the market structure bill.
Fairshake, the industry’s top super PAC, is funded principally by Coinbase, Andreessen Horowitz (a16z), and Ripple. On Thursday, a16z’s top crypto executive, Miles Jennings, said that while the bill “isn’t perfect,” it must be passed—a direct counter to Brian Armstrong’s contention Wednesday that “no bill” is better than “a bad bill.”
And earlier on Thursday, speaking at an investor summit in St. Moritz, Ripple CEO Brad Garlinghouse signaled his lack of prior warning about Coinbase’s moves against the bill.
“I was surprised how vehemently they came out and said ‘look we can’t support this’,” Garlinghouse said of Coinbase. “The rest of the industry really is still leaning in and supporting it and I think constructively trying to work through.”
🚨Fresh from the #cfcstmoritz panel: Ripple CEO Brad Garlinghouse addresses Coinbase’s withdrawal of support for the CLARITY Act.
“Brian Armstrong and the Coinbase team have raised, you know, fair concerns. I was surprised how vehemently they came out and said ‘look we can’t… pic.twitter.com/kIhlEgfna3— CfC St. Moritz (@cfcstmoritz) January 15, 2026
“Inaction is unacceptable,” Cody Carbone, CEO of crypto nonprofit The Digital Chamber, stated Thursday. “We cannot afford to walk away from the table at a moment when clarity is within reach.”
According to Carbone, “market structure must move forward, and the only path to longstanding policy is getting back to the negotiating table and finishing the job.”
The public infighting between the industry’s titans reveals a deep strategic divide. While Coinbase is willing to play hardball, potentially leveraging its political clout to demand a better bill, other heavyweights like a16z and Ripple seem to favor a more pragmatic approach, fearing that a perfect bill is the enemy of a good one. This schism could embolden lawmakers to ignore industry demands altogether, leaving the entire effort in limbo.
While the current administration has been far more friendly, closing many of the SEC’s aggressive lawsuits against exchanges like Coinbase, the industry knows that political winds can shift. They’re seeking durable legislation to prevent a repeat of the past, but not at the cost of kneecapping the very innovation they’re trying to protect. For now, the message from Capitol Hill is clear: no bad bills. The wait for clear rules of the road continues.