Senate Postpones Crypto Market Structure Legislation to Gain Bipartisan Backing

Senate Agriculture Committee Chairman John Boozman has delayed a scheduled markup of bipartisan cryptocurrency legislation until late January, citing the necessity for extra time to finalize outstanding policy aspects and secure widespread congressional backing.

This postponement follows discussions over the weekend with Democratic lead Senator Cory Booker regarding the Digital Asset Market Clarity Act, which delineates regulatory responsibilities between the SEC and CFTC while creating frameworks for stablecoin yields, DeFi protections, and classifications of digital assets.

The delay introduces further uncertainty to legislation already encountering political challenges as the 2026 midterm elections draw near, with some analysts cautioning that its passage may extend into 2027, despite strong support from the Trump administration and newly appointed SEC Chair Paul Atkins, who noted this as “a big week for crypto” while encouraging Congress to take digital asset markets “out of the regulatory gray zone.“

This is a big week for crypto – Congress is on the brink of modernizing our financial markets for the 21st century.
I fully support Congress in clarifying the jurisdictional division between the SEC and the @CFTC. pic.twitter.com/NtDWRW85kL

— Paul Atkins (@SECPaulSAtkins) January 12, 2026

Banks Contest Stablecoin Yield Provisions in Final Talks

Traditional banking associations have ramped up lobbying efforts to limit stablecoin rewards beyond the GENIUS Act’s framework, which allows third-party platforms to provide incentives while prohibiting direct interest payments from issuers.

The latest draft from the Senate Banking Committee, released late Monday after what sources described as a “doozy” of a day, forbids companies from paying interest merely for holding balances but permits rewards linked to account creation, transaction activities, staking, liquidity provision, collateral deposits, or governance involvement.

NEW: The Senate Banking Committee is working to file its latest (still) bipartisan market structure text before midnight after what’s been described to me as a “doozy” of a day, filled with intense disagreements from both sides over stablecoin yield, now emerging as THE most contentious issue…

— Eleanor Terrett (@EleanorTerrett) January 13, 2026

The American Bankers Association cautioned in a recent letter that “if billions are diverted from community bank lending, small businesses, farmers, students, and home buyers in towns like ours will suffer,” arguing that crypto exchanges cannot replicate FDIC-insured products or address lending gaps resulting from deposit outflows.

Consequently, Coinbase has warned it may withdraw support if Senate negotiators impose restrictions beyond enhanced disclosure mandates, with Chief Policy Officer Faryar Shirzad arguing that “undermining the supremacy of the USD has been a long-standing aim of the PRC—the Senate banning rewards would significantly aid China’s efforts,” noting that Beijing announced plans to offer interest on its digital yuan starting January 1, 2026.

Stablecoin rewards are vital revenue for Coinbase, which distributes interest income from USDC reserves with Circle Internet Group and offers 3.5% yields on Coinbase One balances, with Bloomberg estimating the exchange’s total stablecoin revenue reached $1.3 billion in 2025.

Jake Chervinsky of Variant Fund expressed doubts regarding the yield restrictions, stating, “there are a few elements left that could derail the market structure bill, and stablecoin yield is one of them,” adding, “what does stablecoin yield have to do with market structure, you ask? Good question! NOTHING. Except the banks have sway and they want their regulatory advantage back.“

There are a few factors left that could derail the market structure bill, and stablecoin yield is one of them.
What does stablecoin yield have to do with market structure, you ask? Good question! NOTHING.
Except the banks have sway and they want their regulatory advantage back. https://t.co/Ruz8RFk1Xj

— Jake Chervinsky (@jchervinsky) January 13, 2026

Legislative Timeline Encounters Midterm Election Pressure

Three Democratic senators, Chris Van Hollen, Tina Smith, and Jack Reed, sent a letter to Banking Committee leaders demanding a complete hearing prior to Thursday’s markup, criticizing the absence of text “just two days before the markup, deeming the timeline insufficient for voting on ‘the most significant law considered by the committee this century.’“

The lawmakers pointed out that neither the full committee nor the public had encountered any text resembling the legislation impacting 68 million American crypto owners and the $3 trillion digital asset market by 6 p.m. Monday, ahead of the 10 a.m. Thursday vote.

NEW: Late-night appeal from Democratic Senators on the Banking Committee for a complete hearing prior to Thursday’s markup.
Sens. @ChrisVanHollen, @TinaSmithMN, and @SenJackReed sent a letter to @BankingGOP leadership criticizing the lack of text (anticipated to be well over 200 pages)… pic.twitter.com/LNbYsTZVqY

— Eleanor Terrett (@EleanorTerrett) January 13, 2026

Amid growing bipartisan resistance and pressure from bankers, TD Cowen warned that the 2026 midterms could postpone passage until 2027, with Senate Democrats possibly withholding support as lawmakers position themselves for the next electoral cycle.

Bloomberg Intelligence analyst Nathan Dean even suggested that the markup’s lack of bipartisan support may reduce the odds of passing in the first half to below 70%, while full implementation could extend to 2029 depending on election outcomes that reshape congressional control.

Notably, the new legislation contains an “ETF safe harbor” which automatically classifies tokens as non-securities if they were principal assets of exchange-traded products listed on national securities exchanges as of January 1, treating major altcoins similarly to BTC and ETH from the outset.

Bill Hughes of Consensys also mentioned that the bill “truly does safeguard non-custodial trading interfaces” by establishing regulatory boundaries based on custody and control rather than interface popularity, stating “if users trade through their own keys, you’re software” versus “if users trade through their own keys, you’re software.“

The new Senate Banking draft of market structure just was published and here is where ChatGPT says it draws the regulatory perimeter when it comes to self-custody interfaces (This is quick – a deep dive is required):
This is the essence of this bill — and the answer is yes, it…

— Bill Hughes (@BillHughesDC) January 13, 2026

SEC Chair Paul Atkins voiced full support for congressional action, stating, “passing bipartisan market structure legislation will help us safeguard against rogue regulators, ensuring that we achieve President Trump’s objective to establish the U.S. as the crypto capital of the world,” while expecting the president to sign the legislation “in the coming months.“

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