The delay is having the greatest impact on crypto exchanges, decentralized finance (DeFi) and altcoins, because those businesses are especially sensitive to regulation, according to the report. Bitcoin and infrastructure firms have been less affected, the report said.
If Congress fails to pass the legislation this year, the U.S. crypto market would remain constrained at a time when the digital asset ecosystem is increasingly being adopted around the world and by institutions, per the report.
Palmer said that he believes it is more likely than not that a crypto market structure bill will be passed, though it could be altered from its current form, and that the passage of any form of legislation would reduce regulatory risk and encourage broader institutional participation, according to the report.
It was reported Wednesday (Jan. 21) that the crypto bill could be delayed for weeks in the U.S. Senate because lawmakers on the Senate Banking Committee had shifted their focus to housing affordability legislation.
The Senate Banking Committee postponed a scheduled markup of the crypto bill on Jan. 15 after cryptocurrency exchange Coinbase withdrew its support for the draft.
Coinbase CEO Brian Armstrong said in a Jan. 15 post on X, a day before the scheduled markup: “We’d rather have no bill than a bad bill. Hopefully we can all get to a better draft.”
Senate Banking Committee Chairman Tim Scott announced the pause hours later, saying in a press release that bipartisan negotiations would continue.
PYMNTS reported at the time that the crypto industry’s legislative momentum had fizzled out over a variety of unresolved issues raised by both financial services industry groups and crypto groups.
Banks have increasingly lobbied against crypto offerings that resemble deposit products, especially stablecoin rewards that, in their view, compete against regulated interest accounts. This banking pushback has seeped into the legislative text, prompting provisions aimed at limiting crypto incentives, which were a key flashpoint for Coinbase and other developers of stablecoin-based products.
