A U.S. Senate committee has postponed a planned debate on a major cryptocurrency bill, just hours after Coinbase CEO Brian Armstrong said the company could not support the measure, casting doubt on its future.
The bill, released Monday by the Senate Banking Committee, aims to create the first broad regulatory framework for cryptocurrencies. It would spell out when digital tokens are treated as securities, commodities, or something else, and clarify the role of the U.S. Securities and Exchange Commission in overseeing the industry.
The committee was scheduled to review and amend the bill on Thursday, but canceled the session late Wednesday. The move came after Armstrong wrote on X that the proposal had “too many issues” and that Coinbase could not back it.
The legislation follows years of lobbying by major crypto firms that have pushed for clearer rules. Armstrong said he was concerned the bill would weaken the authority of the Commodity Futures Trading Commission, which the crypto industry generally prefers as a regulator. He also warned it would limit crypto companies’ ability to offer rewards tied to stablecoins, or tokens pegged to the U.S. dollar.
“We’d rather have no bill than a bad bill,” Armstrong wrote, while adding he was still hopeful lawmakers could reach a better outcome.
People familiar with the discussions said Republicans were already divided over how the bill handles stablecoins, and Armstrong’s comments brought those disagreements to the forefront. Lawmakers became concerned the bill did not have enough support to advance out of committee.
To pass the full Senate, the bill would need backing from at least seven Democrats. Some Democrats have raised concerns that it does not do enough to prevent public officials from personally profiting from crypto ventures.
Senate Banking Committee Chairman Tim Scott said lawmakers from both parties and industry leaders were continuing to work on the legislation. The House of Representatives passed its own version of the bill in July.
One of the most debated issues is whether crypto firms should be allowed to pay interest or rewards on stablecoin holdings. Banks argue this could pull deposits out of the traditional banking system and threaten financial stability. Crypto companies counter that banning such incentives would hurt competition. The current Senate proposal would ban interest payments but allow certain rewards tied to activities like payments or loyalty programs.
Featured image from: x.com