Bill stalls: Coinbase throws a fit, has the "US engine" of the bull market stalled?

Update Date: 2026-01-15 Disclaimer: For research and content creation purposes only; not investment advice. Cryptocurrency assets are highly volatile; please bear your own risks.

0. Summary

Recently, the US Senate advanced the Crypto Market Structure Act (the “overall framework” for market rules), but as it approached key stages (Markup / discussion of revisions), an “unexpected brake” appeared: Coinbase CEO Brian Armstrong publicly withdrew support, and the Senate Banking Committee subsequently postponed the related agenda. The market’s biggest concern isn’t whether it’s “bearish,” but whether the “bullish engine” of US regulatory clarity is just a short-term pause for maintenance or a complete shutdown.

My conclusion is: in the short term, emotions cool down / volatility amplifies; in the medium term, it depends on whether the terms can be “revised to an industry-acceptable version”; in the long term, the direction remains “legislation providing clarity,” but the process will be more tug-of-war and iterative.

1. What exactly happened?

This isn’t “suddenly gone,” but “disagreement at the final moment.”

1.1 Key milestones

The Senate Banking Committee previously announced: plans to conduct a Markup on the “Digital Asset Market Structure Legislation” on January 15 (a critical step where committee members discuss, propose amendments, and push forward). But on the eve of the agenda, Coinbase CEO Armstrong stated that the company could not support the current version, noting that “this version might be worse than the current situation.” Subsequently, Senate Banking Committee Chair Tim Scott said it was a “short pause,” and negotiations are still ongoing.

“It’s like a rocket about to take off, but suddenly discovering a fuel line issue before ignition—not that it won’t fly, but whether to repair it first, how to repair, and who makes the call.”

2. What exactly does this “Market Structure Bill” aim to solve? (Why is it the “US engine”)

Many retail investors have no concept of “market structure.” To put it simply:

Market Structure Bill = a set of overarching rules in the US that define “who regulates whom, how tokens are issued, how they are listed, and how to comply.”

2.1 Core conflicts it aims to resolve

The biggest past problem in the US crypto scene was:

SEC claiming many tokens are securities (subject to securities issuance/trading rules) Industry arguing many tokens are more like commodities / network assets (should be regulated by CFTC for spot trading) The result is: unclear rules → hesitation among large institutions → limited capital allocation → innovation and business migration abroad

Market calls this legislation the “engine” because it can directly change:

Whether institutions can buy with confidence Whether exchanges / custodians / market makers can expand compliantly Whether clone projects / DeFi are considered “legal and permissible” in the US

3. Why did Coinbase “flip the table”? (Dissecting controversial clauses into “4 contradictions”)

3.1 Contradiction 1: Tokenized equities are “substantially banned”

Armstrong mentioned that the bill would impose factual restrictions on tokenized equities. A simple translation:

If “tokenized equities” are strictly restricted, the US might hand over the future route of “on-chain securities / assets on-chain” to overseas jurisdictions. For companies like Coinbase aiming to build “compliant on-chain financial infrastructure,” this is a strategic risk.

“Will this affect RWA narratives?” — Yes, at least it will impact the pace of “compliance progress within the US.”

3.2 Contradiction 2: DeFi clauses might turn into “regulation of code”

Armstrong pointed out that the clauses would impose many restrictions on DeFi. A key principle of the Market Structure Bill should be: regulate intermediaries, not pure code. If it shifts to “regulating protocol layers / developers,” industry backlash will be significant.

“Is DeFi going to die?” — Not necessarily, but it will make US DeFi compliance more difficult.

3.3 Contradiction 3: Stablecoin rewards / yields are being squeezed

The controversy mainly revolves around:

Legislation potentially restricting the model of “paying interest just for holding stablecoins” (similar to deposit interest substitutes) But possibly allowing “activity-based rewards” (e.g., trading, payments, usage rebates)

Behind this is a fierce battle with the banking industry:

Banks don’t want stablecoins to become “de facto deposits,” competing with their savings.

“Is this bearish for USDT/USDC?” — Not necessarily, but it will affect “yield-bearing stablecoins” and third-party platform reward models.

3.4 Contradiction 4: CFTC authority is being weakened (industry’s desired “spot market regulation” may be compromised)

A core industry demand in the legislation is: clarify and strengthen CFTC’s regulation of the spot market. But Coinbase believes some revisions will “weaken” this.

“Who currently has the upper hand?” — It’s a tug-of-war: banking regulators, SEC, CFTC, and Congress are all vying.

4. Why is this getting stuck? (From a political perspective: not technical, but interests)

The reason can be summarized as:

It’s not “mistakes in drafting laws,” but “too many people’s interests being touched.”

4.1 Banking industry’s concern: stablecoin yields stealing deposits

If stablecoins can easily offer yields similar to “deposit rates,” it will compete with banks. That’s why “stablecoin rewards” is one of the most sensitive clauses.

4.2 Democratic Party’s internal worries: consumer protection, privacy, and power boundaries

Reports mention that some clauses may involve stronger data access/recording rights and stricter anti-money laundering and regulatory reach. This is also why negotiations often get stuck on the “security vs. innovation” boundary.

4.3 Congressional reality: market structure is more difficult than stablecoins

Stablecoins are “a product rule,” while market structure is “industry-wide rules.” Therefore, progress is slow, disputes are frequent, and delays are normal.

5. What does this mean for the market? Is it bearish?

5.1 Short-term: emotions cool down, volatility increases

“Getting stuck” will shift the market from “regulatory optimism” to “waiting + guessing.” The usual result: slower gains, deeper pullbacks, faster sector rotation.

5.2 Medium-term: two possible directions — either fix and continue or split and push

Path A: Fix the clauses → quickly reschedule the Markup

This is mildly bullish (restoring “regulatory clarity expectations”).

Path B: Market structure too difficult → push easier modules first (e.g., stablecoins)

This is “mildly positive” for the market but less effective for clone projects / DeFi than the “overall framework.”

5.3 Long-term: US “setting rules” is a major trend, but the process will be very tug-of-war

The US is unlikely to allow “vague regulation + litigation governance” to continue forever. So the long-term direction remains: rules must be established. Don’t expect a one-time pass or a perfect solution at once.

6. How should traders act? (Practical “scenario analysis”)

Note: The following are trading ideas, not recommendations.

Scenario A: Quick fix, bill back on track (bullish)

Trigger signals:

Senate Banking Committee reschedules Markup Coinbase / major exchanges re-affirm support ETF / institutional funds flow stabilizes

Strategy:

Core holdings: gradually follow trends in BTC/ETH Aggressive positions: small positions in compliant narratives (exchanges, custody, RWA infrastructure, compliant DeFi)

Scenario B: Repeated tug-of-war, long delays (volatile)

Trigger signals:

Continuous “hearings / drafts / delays,” but no clear progress Market structure unclear → funds flow in and out repeatedly

Strategy:

Low leverage, range-bound thinking Light positions in clone projects, prioritize strong main trends and sector rotation

Scenario C: Significant obstacles or “difficult for this session” (bearish / defensive)

Trigger signals:

Key stakeholders openly oppose or escalate conflicts Agenda is shelved long-term Meanwhile, macro risks rise (interest rates / USD liquidity tightening)

Strategy:

Reduce positions, cut risk exposure Keep only the strongest core holdings (or hedge) Quick entry/exit in clone projects / memecoins

7. Conclusion

“This time, the bill getting stuck doesn’t mean the US engine is off; it’s more like maintenance before ignition—what truly influences the market isn’t ‘disputes,’ but whether an industry-acceptable version can be negotiated. Short-term volatility will increase, but as long as legislative direction continues, long-term regulatory clarity remains the narrative most favored by capital.”

8. Next key watchlist

Will the Senate Banking Committee reschedule the Markup (most critical) Will Coinbase release conditions for an “acceptable version” Final terms for stablecoin yields (interest rate vs. activity-based) DeFi boundaries: regulation of intermediaries or code Will CFTC’s spot market regulation authority be explicitly strengthened

Reference Information

Reuters (2026-01-15): After Coinbase opposition, Senate Banking Committee delays discussion; bill aims to clarify securities/commodities boundaries with CFTC regulating spot markets as core direction. Barron’s (2026-01-15): Withdrawal of support causes hearing delay; Armstrong lists concerns about tokenized equities, DeFi, stablecoin rewards, CFTC authority. CoinDesk (2026-01-14~15): Impact of Coinbase withdrawal support and industry negotiations details. Senate Banking Committee (2026-01): Explanation of “CLARITY Act” legislative goals and schedule announcement. The Block (2026-01-13): Disputes over stablecoin yield clauses and draft revision directions. Fortune (2026-01-14): Banking industry and Democratic Party tug-of-war over yield /利益冲突 issues.