Senate Crypto Bill Delayed as Lummis Says Passage Is “Closer Than Ever”
- Senate markup delayed as Coinbase withdrew support, slowing the crypto market structure bill.
- Judiciary leaders say developer protections would weaken federal money transmitter rules.
- Stablecoin rewards limits remain a major issue, adding strain on bipartisan talks.
Sen. Cynthia Lummis said lawmakers are “closer than ever” to passing a U.S. crypto market structure bill. However, Senate momentum slowed in mid-January after delays and committee disputes.
The proposed bill aims to create clearer rules for digital assets in the United States. It would also clarify how the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) oversee crypto markets.
Moreover, Lummis has supported a separate law for developer protections with Sen. Ron Wyden. Earlier this week, Lummis and Wyden introduced the Blockchain Regulatory Certainty Act as a standalone bill. The bipartisan legislation states that software developers and infrastructure providers who do not control user funds are not money transmitters under federal law.
Senate Judiciary leaders challenge Section 604 developer protections
Senate Judiciary Committee leaders told the Senate Banking Committee to drop developer protections from the market structure bill. In a letter dated January 14, Sens. Chuck Grassley and Dick Durbin said the Blockchain Regulatory Certainty Act would weaken federal money transmitter rules. They also said it should not be included in crypto market structure legislation.
Their letter targeted Section 604 in the Banking Committee draft. Section 604 aims to protect some software developers from criminal liability when third parties misuse their products.
Supporters say developers should not face charges when they do not control customer funds. However, Grassley and Durbin said the language would “weaken” laws used against unlicensed money transmitting businesses. They urged Banking leaders to remove text that limits accountability for “culpable actors.”
The letter also raised a process complaint. It said Banking leaders did not consult the Judiciary Committee in advance. It also said the Judiciary did not get a meaningful chance to review the change.
Grassley and Durbin cited the Justice Department’s case against Roman Storm, a Tornado Cash developer. They argued the prosecution shows why the current statute remains important.
If Banking keeps Section 604, the dispute could add steps before a Senate vote. Judiciary leaders signaled they expect a review of any criminal-law changes.
CLARITY Act delay follows fight over stablecoin rewards
The Senate Banking Committee canceled a planned markup session after opposition grew on Wednesday. That setback followed a support withdrawal from Coinbase CEO Brian Armstrong. He said Coinbase could not support the bill “as written.”
Armstrong said Coinbase would “rather have no bill than a bad bill.” He cited what he called a “de facto ban on tokenized equities.” He also criticized limits tied to decentralized finance. In addition, he said the text weakens the CFTC and favors the SEC.
Stablecoin rewards also remain a major concer. Banks have warned rewards could pull deposits from insured banks. However, crypto firms and trade groups have rejected that claim stating restrictions would reduce consumer choice.
The bill would prohibit digital asset firms from paying interest simply for holding a stablecoin. However, it would allow activity-based rewards for certain activities like transacting, staking, providing liquidity, or posting collateral. Reuters also said the SEC and CFTC would have to write a joint disclosure rule for rewards.
Furthermore, industry groups have blamed bank lobbying for slowing progress. Blockchain Association CEO Summer Mersinger said a “pressure campaign by the Big Banks” threatens progress.
Related: Lummis Says Crypto Bill Will Split Securities and Commodities
Lummis presses ahead as Senate crypto talks continue
Lummis has maintained that Congress can still reach a final decision. The U.S. crypto market structure bill would define when tokens count as securities or commodities. That framework would shape listings, token design, and oversight of spot crypto markets.
Timing now matters as Congress may turn toward the 2026 midterm elections. The information provided also said the Senate Agriculture Committee postponed its own markup until January 27 while talks continue.
The information provided did not include a new markup date for the Senate Banking Committee. However, negotiations continue and Lummis says lawmakers are “closer than ever” to passage.
