- Senate delays CLARITY Act markup after Coinbase withdraws support over stablecoin and DeFi provisions.
- Banking groups warn stablecoin rewards could trigger deposit outflows and strain community bank lending.
- White House adviser says crypto market structure bill remains close despite legislative pause.
The U.S. Senate has postponed a planned markup of the CLARITY Act, a proposed crypto market structure bill, following a withdrawal of support from Coinbase and renewed pressure from the banking industry over stablecoin rewards. The delay has left the bill without a revised timetable and introduced fresh uncertainty around near-term crypto regulation in the United States.
The Senate Banking Committee confirmed that the markup would not proceed as scheduled. Committee Chair Tim Scott acknowledged the postponement but did not provide a new date. The decision came hours after Coinbase publicly stated it could not support the bill in its current form.
Stablecoin Rewards at Center of Banking Pushback
Banking trade groups have intensified lobbying efforts against provisions that could allow stablecoin rewards to persist through third-party arrangements. In a letter sent to senators, organizations, including the American Bankers Association, warned that such mechanisms could lead to deposit outflows, particularly from community banks, and weaken local lending capacity.
The groups argued that while the GENIUS Act addressed stablecoin issuance, it left what they described as a loophole allowing rewards to continue indirectly. The letter cautioned that without clearer statutory restrictions in market structure legislation, large volumes of deposits could shift away from traditional banks.
Executives at JPMorgan Chase & Co. have previously echoed concerns that yield-bearing stablecoins could draw funds out of the banking system, according to public remarks cited by market participants.
Related: ‘Bitcoin Senator’ Cynthia Lummis Is Calling It Quits After One Term in the U.S. Senate
Coinbase Flags DeFi and Market Structure Concerns
Coinbase Chief Executive Brian Armstrong stated that the company could not support the bill as written, citing several issues. These included restrictions on decentralized finance, limits on stablecoin rewards, and what he described as an erosion of the Commodity Futures Trading Commission’s authority.
Armstrong stated that the current draft would leave the industry worse off than the existing regulatory environment and said Coinbase would prefer no legislation over a bill that failed to address those concerns.
White House Adviser Urges Industry Engagement
Despite the delay, White House adviser David Sacks said the legislation remains close to passage. He urged the crypto industry to use the pause to resolve remaining disagreements rather than disengage from the process.
Sacks said the moment represents an opportunity to finalize market rules and shape the future regulatory framework. He framed the delayed markup as an opportunity for continued negotiation as lawmakers work to reconcile competing interests surrounding stablecoins, tokenized assets, and decentralized finance.
Related: U.S. Senate Agriculture Committee Sets New January Timeline for Crypto Market Structure Markup
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Source: https://coinedition.com/u-s-senate-delays-clarity-act-markup-after-coinbase-withdraws/
