The Senate Banking Committee has postponed its planned markup of crypto market structure legislation after growing industry backlash and political disagreements stalled progress.
What Happened: Journalist and host Eleanor Terrett on Friday outlined that frustration remains high nearly a day after the GOP-led Banking Committee pulled the markup.
However, insiders believe the bill is not dead.
Industry participants and committee staffers say that if banks, Coinbase (NASDAQ:COIN) and Senate Democrats can quickly reach a compromise on stablecoin yield, the legislation is likely to move forward again.
Section 505, which addresses tokenized securities, is increasingly viewed as a non-issue.
Tokenization firms argue that Coinbase's objections stemmed from language taken out of context.
Key stakeholders, including Coinbase CEO Brian Armstrong, have signaled that the section could be significantly revised or removed altogether.
Ethics concerns remain unresolved, with discussions continuing between the White House and the Senate.
From a procedural standpoint, the Banking Committee's delay is not expected to disrupt the Agriculture Committee's timeline.
Sources say sequencing is less important, and that a strong bipartisan deal emerging from Agriculture could help push the bill through Senate Banking, like how momentum built around the Clarity Act in the House last summer.
Why It Matters: Terrett noted that some of the damage was mitigated after major crypto firms and industry groups, including a16z, Circle (NASDAQ:CRCL), Paradigm, Kraken, Ripple (NASDAQ:XRP), Coin Center, and the Digital Chamber, publicly urged lawmakers to proceed with a markup and continue negotiations rather than abandon the bill.
Senate Banking Chairman Tim Scott (R-SC) said talks are continuing in good faith, though he did not provide a timeline for when the markup could be rescheduled.
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