Behind the Shelving of the U.S. Senate Crypto Bill: How Deep Are the Regulatory Divisions?

The crypto market faces new regulatory uncertainties. On January 17, the scheduled hearing for the US Senate Banking Committee on the Crypto Market Structure Bill was announced to be postponed, a delay that has drawn widespread attention both inside and outside the industry.

Supporters Suddenly Reverse, Bill Stalls

The trigger for the event was quite dramatic—Coinbase CEO Brian Armstrong withdrew his support for the bill at a critical moment. Armstrong’s opposition focused on three sensitive areas: the definition of tokenized securities, regulatory restrictions on DeFi activities, and the handling of stablecoin yield mechanisms. His change of stance directly prompted Senate Banking Committee Chairman Tim Scott to announce the postponement of the hearing.

According to Alex Thorn, Research Director at Galaxy Digital, this is not just a matter of individual position adjustments but a reflection of deep political divisions. In just 48 hours, the bill draft experienced a provisional release, over 100 amendments bombarding it, and stakeholders continuously raising new objections at the last minute. This situation highlights fundamental disagreements between Congress and the industry on key issues.

Market Reacts Immediately

The trading market responded swiftly and directly to this news. Bitcoin and Ethereum both declined by about 2% on the day of the announcement, and the crypto-related US stocks also came under pressure—Coinbase dropped 6.5%, Robinhood fell 7.8%, and Circle declined 9.7%. These figures clearly indicate that regulatory policy uncertainties are directly eroding investor confidence.

Thorn’s Insightful Observation

In subsequent analysis, Alex Thorn pointed out a seemingly contradictory but actually profound phenomenon: although the “Market Structure” framework has largely reached consensus, non-core issues such as stablecoin yield distribution, DeFi compliance standards, and SEC’s authority in the field of tokenized securities have formed irreconcilable political stances.

He summarized the current deadlock with one sentence—“The surface differences are small, but the underlying gaps are deep.” This observation suggests that the real problem is not about fundamental ideological differences but about the fundamental opposition of detailed provisions. From a certain perspective, this may be even more difficult to resolve than outright ideological disagreements.

Since the Senate will go into recess next week, the bill’s review could restart as early as January 26-30. However, given the current level of disagreement, whether a breakthrough can be achieved in the new hearing remains a key concern for the industry.