- Coinbase faced criticism from the crypto community after it became clear that its withdrawal of support caused the latest delay in the market structure bill markup.
Senator Tim Scott, Chairman of the Senate Banking Committee, confirmed on Wednesday that his group will postpone the markup of the digital asset structure legislation, which the legislature earlier scheduled for Thursday. He stated that bipartisan negotiations are ongoing amid the pause, but it’s still unclear whether they have set up a new date for the markup.
So Close to a Solid Bipartisan Support
David Sacks, the White House’s AI and crypto czar, claimed that the market structure legislation “remains as close as it’s ever been.” Hence, he urged lawmakers to take advantage of the pause to iron out the kinks of the draft bill and resolve their differences.
According to Senator Cynthia Lummis’ interview with Crypto in America’s Eleanor Terrett, the latest postponement marks the fifth time the Senate has pulled back the bill’s markup. She revealed that the cancellations were due to members of the Committee not yet being ready to give their full support on the legislation.
Coinbase Gets Flak for the Crypto Market Structure Bill Setback
It has come to light that the real cause of the recent delay was Coinbase’s withdrawal of support for the bill. The event drew massive heat from the crypto community, whose members criticized the crypto exchange platform for only allegedly prioritizing its own interests over the healthy development of the digital asset market.
The latest developments have also sparked debate about how much lobbying power Coinbase wields in the legislature. Nonetheless, Coinbase CEO Brian Armstrong immediately took it to X to explain their company’s side of the story.
Coinbase Refuses to Support the Bill’s Current Form
Armstrong said Coinbase can’t support the current version of the bill because it found many issues that would be detrimental to the interests of the crypto industry. These include a de facto ban on tokenized equities, prohibitions on decentralized finance (DeFi), and unrestricted government surveillance on the financial records of industry participants.
Additionally, the Coinbase boss highlighted that the proposal erodes the Commodity Futures Trading Commission’s (CFTC) authority by making it subservient to the Securities and Exchange Commission (SEC). He indicated that it could potentially stifle innovation under a more restrictive SEC regime.
Moreover, Armstrong criticized the crypto market structure bill’s provisions on stablecoin rewards, which will allow banks to ban competition. Terrett previously referred to the matter as the “thorniest issue” in the bipartisan negotiations.
The bill’s draft has retained the prohibition on companies or issuers paying interest solely for holding stablecoin balances. Users can only earn rewards if the stablecoins are tied to opening an account or to activities such as making transactions, staking, providing liquidity, putting up collateral, or participating in network governance.
Many took the limitations as a way to appease legacy financial institutions, who are worried that high stablecoin yields would take away conventional customer deposits from banks.
Armstrong remarked that they appreciate the hard work of the Senate’s bipartisan efforts, but he believes the current form of the bill is “materially worse” than the status quo. He opined that his group prefers having no bill at all rather than dealing with a bad regulatory and legal framework.
What’s your Reaction?
+1
3
+1
0
+1
0
+1
0
+1
0
+1
0
+1
0
