The Senate Banking Committee has postponed its planned markup and vote on the Digital Asset Market Structure CLARITY Act after a sudden reversal in industry backing left the bill short of the votes needed to advance.
The delay follows mounting resistance from key market participants and internal concerns among lawmakers, forcing leadership to pull the measure from the committee’s schedule.
The immediate trigger was the withdrawal of support from Coinbase, the largest cryptocurrency exchange in the United States. On January 14, Coinbase CEO Brian Armstrong said the Senate’s revised draft was “materially worse than the status quo,” arguing it would weaken the authority of the Commodity Futures Trading Commission, eliminate rewards on stablecoins, and impose what he described as a de facto ban on tokenized equities.
Votes Fell Short in Committee
Committee Chair Tim Scott ultimately pulled the vote after it became clear the bill lacked sufficient bipartisan support. Democratic members raised objections over the absence of public hearings on the rewritten draft and pressed for additional ethics provisions aimed at limiting financial ties between the Trump family and the crypto industry.
The breakdown exposed sharp divisions not only within the committee, but across the digital asset sector itself. While Coinbase stepped away, other industry players, including Kraken, a16z Crypto, and Ripple, continued to back the bill. Those firms have argued that advancing legislation, even with flaws, is preferable to continued regulatory uncertainty and is critical for maintaining U.S. competitiveness in digital finance.
Provisions at the Center of the Dispute
Several elements of the 2026 Senate draft drew the strongest pushback. Critics said the bill’s decentralized finance provisions could force permissionless protocols into traditional banking compliance frameworks. Section 404, which would prohibit digital asset firms from paying interest or rewards solely for holding stablecoins, became a flashpoint, viewed by opponents as a concession to traditional banking interests.
Surveillance concerns also gained traction online, with claims the bill would introduce sweeping monitoring powers. Legal analysts noted that the requirements were largely limited to registered exchanges, though the perception added to political pressure.
What Happens Next
With the 2026 midterm election cycle approaching, the bill’s path forward is increasingly uncertain. Senate Agriculture Committee Chair John Boozman has delayed his panel’s separate markup until the final week of January to allow more negotiations.
Market analysts have lowered the odds of passage this year to around 60%, warning that the setback could push any final vote into the third quarter, if it happens at all.
