The U.S. Senate Banking Committee has delayed a key vote on the CLARITY Act, a long-awaited crypto regulation bill, after Coinbase withdrew its support. The move came just hours before the committee was expected to begin formal discussions. Coinbase CEO Brian Armstrong criticized the latest version of the bill, arguing it would damage the company’s business and the broader crypto sector.
The bill aimed to define how digital assets should be regulated in the United States. It proposed splitting responsibilities between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), while setting clearer rules around stablecoins, decentralized finance (DeFi), and tokenized equities.
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Key Disagreements
Coinbase’s main objections focused on several provisions in the revised draft. One would prevent platforms from offering rewards on stablecoins unless they register as financial institutions. Another would limit the use of tokenized equities and impose stricter compliance requirements on DeFi platforms. Armstrong described these changes as worse than the current system, which already relies heavily on enforcement rather than clear guidelines.
Other crypto firms, including Kraken and Circle, have continued to support the bill. They argue that passing legislation, even if not perfect, would reduce uncertainty and allow U.S.-based platforms to operate under a more stable framework.
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Political Tensions Complicate Progress
Beyond industry disagreements, the bill also faced new political resistance. Some Democratic senators raised concerns about the lack of ethics provisions in the revised text and requested more time to examine the proposed changes. There were also disagreements over how much power should be given to the SEC compared to the CFTC.
Committee Chair Tim Scott said the pause was tactical and that discussions are ongoing. However, the lack of bipartisan agreement has made it unlikely the bill will advance in its current form. A separate hearing led by the Senate Agriculture Committee, which oversees the CFTC, is still expected later this month.
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Outlook for Regulation Remains Unclear
The CLARITY Act was seen as a potential turning point for U.S. crypto policy, with hopes that it would finally provide consistent rules for both companies and users. The current delay leaves those hopes in question. Without an agreement, many of the industry’s key issues – such as how stablecoin rewards are handled and which tokens are treated as securities – remain unresolved.
While lawmakers and industry representatives say they are continuing to negotiate, the setback raises doubts about whether a comprehensive regulatory bill can pass this year. Some analysts now believe any significant progress may be pushed even to 2027, depending on the outcome of upcoming elections.
