Crypto Regulation Rift Widens as Republicans Reject Market Structure Bill
The Senate Banking Committee’s planned markup of the legislation has been postponed, as Coinbase CEO Brian Armstrong has withdrawn his support for a market structure bill that seeks to consolidate federal regulations regarding crypto markets, stablecoins, and DeFi.
Based on reports, this unexpected withdrawal sharpened the tension between the senators in the debates of the bill and the lawmakers who were trying to revive the sensitive clauses.
Republican Concerns Overlook
The Republicans in the Senate, under the leadership of Sen. Tim Scott, strongly opposed. They expressed doubts about whether it is intended to help ordinary investors or just a few companies.
While some representatives have expressed their concern that the broad oversight authority may prevent growth beyond the proposed net yield of stablecoins, reports have indicated that Republicans want more clarity on enforcement authority versus broad regulatory language.
Crypto developers need clear rules of the road.
Over the past five years, Republicans, Democrats, and the Trump Administration have worked closely with members across the crypto industry to protect diversification, support developers, and give entrepreneurs a fair chance.
In his country…
– Chris Dixon (@cdixon) January 15, 2026
Bitcoin Is Unfazed by the Standoff
Despite the confusion, crypto prices remain strong. Bitcoin held the ground and rose 1.5%. The top crypto asset held its $96,000 level, while other top cryptocurrencies such as Ethereum and USDT also made similar gains in the past 24 hours, based on the latest market tracking statistics.
Meanwhile, investors followed the speeches and conference sessions. Market volatility has increased. Some investors have chosen to take a stand on the sidelines as lobbyists and exchanges seek to shape the next draft.
After reviewing the Senate Banking draft text 48 hours ago, Coinbase unfortunately cannot support the bill as written.
There are many problems, including:
– Defacto ban on equity tokens
– DeFi restrictions, which give the government unlimited access to your finances…– Brian Armstrong (@brian_armstrong) January 14, 2026
As a response to the new draft of the bill released by the Senate, representatives of several industries have loudly opposed its provisions and expressed their belief that it may have a negative impact on token shares and Fixed Income.
In fact, there is enough concern in the blockchain sector that Armstrong has raised, he said he would rather see a bill than a bad bill passed, indicating that even some members of his industry agree with Republican concerns about possible Congressional interference.
These industry groups say they will likely withdraw their support unless the Senate makes the necessary changes to continue innovation and cross-border competition around blockchain technology.
Negotiations Continue to Take Place Behind Closed Doors
Some Senate leaders still want to move to a committee vote, although disagreements remain deep. Republican and Democratic lawmakers are currently negotiating or trading potential amendments on issues such as stablecoin legislation, DeFi protection and investor protection in an effort to reach an agreement on a bipartisan version of the bill.
Democrats have identified the need to address regulatory issues related to ethics, possible Money Laundering, and over-regulation of DeFi as a priority. On the other side of the isle, the Republican Party continues to push for legislation that clearly defines guardrails for federal regulators regarding blockchains.
As a result of ongoing negotiations, there is currently no set timeline for a Senate vote on the new legislation.
Featured image from Unsplash, chart from TradingView
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