Senate Crypto Markup Postponed Following Coinbase Opposition

Today was set to be a pivotal day for the tech and finance communities with two highly anticipated congressional committee markups on the calendar. However, the market landscape shifted abruptly as the Senate Banking Committee postponed its markup of the Digital Asset Market Clarity Act following a withdrawal of support from key industry players.

While the House Energy and Commerce Subcommittee proceeds with its agenda on telecommunications and economic growth, the delay in the Senate has introduced a new wave of uncertainty into the crypto markets. Here’s what you need to know.

The Senate Banking, Housing, and Urban Affairs Committee

The Senate Banking, Housing, and Urban Affairs Committee was scheduled to meet at 10:00 AM to markup H.R. 3633, also known as the Digital Asset Market Clarity Act of 2025. However, Chairman Tim Scott announced a pause to allow for further bipartisan negotiation.

The CLARITY Act is seen as crucial for cryptocurrency and blockchain asset adoption by institutional investors. It includes several key regulations, providing more transparency to the often confusing digital assets approval process. Notably, the bill aims to place concrete definitions on digital commodities and set out easy-to-follow registration guidelines.

Key Regulations

Notably, the bill describes these digital commodities as being linked to a blockchain and not violating securities laws. However, it does make some clear distinctions regarding stablecoins, staking, and utility tokens. Additionally, there are exemptions for secondary markets and DeFi protocols.

These exemptions were meant to prevent a lull in innovation due to restrictions. The goal is to enable DeFi developers to continue to think of new and innovative ways to expand the tech. However, there has been some debate surrounding key aspects such as staking stablecoins.

Staking Stablecoin Debate

Staking is one of the main issues that stalled the bill, as there is a lot of influence on both sides of the debate. Central bankers believe that it should be illegal to pay staking rewards on stablecoins. They fear that allowing this feature would cause massive capital outflow from their institutions, jeopardizing the stability of the entire market.

On the other side of the debate, you have platforms like Coinbase (COIN +0%) that have built staking into their core features. They argue that users have a right to choose to stake their stablecoins and that the bank’s profitability shouldn’t have anything to do with the legality of the feature.

Oversight

CLARITY would divide up the oversight responsibilities between the SEC (Securities and Exchange Commission) and the CFTC (Commodity Futures Trading Commission). If passed, the SEC would become the sole regulator for investment contract tokens. This includes security tokens, centralized tokens, and ICOs.

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Additionally, the SEC would gain clear oversight over the stablecoin market. Interestingly, the bill makes a clear distinction between stablecoins backed by fiat currencies and those backed by other digital assets.

CFTC

The CFTC would gain regulatory oversight over digital commodities that reside on blockchains. This designation means that the group would be in charge of dealers, brokers, exchanges, and spot markets. This decision would alleviate some of the responsibilities of the SEC.

As part of the agreement, the CFTC would be in charge of new platform registrations, creating and enforcing regulatory standards, custody requirements, and AML compliance. Notably, institutional investors support this move, which could potentially unlock billions in liquidity for leading projects.

SEC–CFTC Joint Oversight Framework

The two regulatory bodies will meet up several times a year to institute new regulations and review past changes. This collaboration includes joint rulemaking and reviewing emerging assets and features to ensure they are compliant.

Lawmakers Supporting the CLARITY Act

There are several lawmakers who are working together to ensure CLARITY passes. The House Financial Services Committee Chairman, French Hill (R-AR), introduced the bill, citing a need for clearer regulations in the industry to spur growth and remain competitive while protecting consumers.

The bill was co-sponsored by French Hill (R-AR) and Bryan Steil (R-WI). They sponsored the bill on the belief that it was vital to help keep the US competitive in the digital economy moving forward. They have also spoken on the importance of self-custody and driving innovation in the market. House Agriculture Committee Chair Glenn Thompson (R-PA) also stepped up to help push the bill, citing its bipartisan support and consumer protections.

Opposition to the CLARITY Act

Not everyone is on board with CLARITY. On the other end of the aisle, you have opponents like Ruben Gallego (D-AZ), who believes the bill leaves much to be desired in terms of consumer protections. He has also been pivotal in demanding that a provision barring politicians from profiting on crypto holdings be included.

Elizabeth Warren (D-MA) is another outspoken opponent of the bill and digital assets in general. She believes that these assets lack protection and transparency. As such, she has opposed most pro-crypto regulations since day one.

Some major organizations have voiced concerns with CLARITY, including the North American Securities Administrators Association (NASAA). This group has stated that the legislation would only work to loosen anti-fraud regulations rather than protect investors. Specifically, they request clearer definitions and fraud prevention measures.

The House Energy and Commerce Subcommittee

While the Senate stalls, the House Energy and Commerce Subcommittee met today at 9:00 AM. This meeting covered a broad scope of tech, including the integration of 5G networks and international competition in the sector. The group also discussed digital security concerns and the US’s ranking in terms of innovation in key sectors.

Potential Market Implications

The delay in the Senate markup has created immediate ripples. Most analysts agree that while the CLARITY Act could have long-lasting ramifications, the inability to reach a consensus creates short-term volatility.

Positive Developments

If the CLARITY Act eventually passes, it will be seen as a positive for the market in general. This decision could be met with bullish activities, including an influx of institutional funding. Notably, there are several investment firms that have long awaited regulatory clarity prior to joining the decentralized economy.

Approval would signal positive investor sentiment and cause a spike in inflow, with some analysts predicting +$1T in investor funds. Long-time crypto projects like Bitcoin (BTC -1.27%) and Ethereum (ETH -1.01%) would enjoy the most gains, with analysts predicting as much as 15% gains in the short term.

Stock Market Response

In the stock market, CLARITY could spur more blockchain demand. Top-performing crypto stocks like Coinbase could see 20% gains directly following positive news, despite their opposition to the bill. Additionally, ETFs could experience more inflow, in turn, driving demand and prices higher.

Delay or Negative Developments

On the other hand, the current delay demonstrates the fragility of the agreement. The lack of support could erode confidence in the bill in the short term, causing prices to fall across the market.

Even a slight delay could result in sharp sell-offs and increased volatility moving forward. Additionally, the sell-offs could extend out of the blockchain space and affect the stock market and ETFs, as institutional investors could decide to hold off or cut back on their offerings until an agreement is made.

Coinbase

The largest crypto exchange in North America, Coinbase, initially showed strong support for the legislation. This support helped the bill pass the House in 2025. However, the exchange’s CEO Brian Armstrong switched stances on January 14th, 2026, over several key aspects of the legislation.

Coinbase’s main issue revolved around a proposed ban on tokenized equities. They also cited concerns over government access to DeFi platforms. Additionally, they voiced issues with the stablecoin reward ban, which would end up costing the company +$1.3B in revenue if instituted. Their withdrawal of support is widely cited as the primary catalyst for the committee’s decision to delay the markup.

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What Investors Should Watch Next

Given the pro-crypto sentiments of this cabinet and growing demand, it’s likely that at least some pro-crypto legislation will pass. However, the current standoff proves that even a “win” can be seen as a loss if it alienates key infrastructure providers. Investors should watch for a rescheduled date for the Senate markup and any amendments regarding stablecoin rewards.

Learn about other interesting digital asset developments here.