Crypto Bill Delayed as Senate Shifts Focus to Housing Legislation

According to a Bloomberg report citing anonymous sources, the Senate Banking Committee is likely to postpone further consideration of the controversial crypto regulations until late February or March. This follows an initial delay last week, which was compounded by cryptocurrency exchange Coinbase withdrawing its support over provisions related to stablecoin yields. The shift in legislative priority aligns with President Trump’s affordability agenda, sidelining the crypto bill in favor of housing legislation. Crypto commentator Eleanor Terrett noted this was “not a great sign for the Senate Banking Committee, which was likely hoping for a bipartisan deal to smooth its own markup.”

The CLARITY Act aims to establish clearer regulatory boundaries between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) over digital assets. However, the path forward has been fraught with disagreement. Ranking Democrats and banking lobby groups have pushed for changes to the legislation, specifically seeking to prevent stablecoin issuers from offering yields. Their concern stems from fears of a deposit flight from traditional banks, where the national average savings account yield is a paltry 0.61%, according to Bankrate, compared to potential yields of up to 5% for holding USD stablecoins.

The core economic tension highlighted by the delay pits traditional banking interests against the emerging digital asset ecosystem. Low interest rates benefit banks’ profit margins but erode savers’ purchasing power over time due to inflation. The prospect of higher yields on stablecoins presents a competitive threat to traditional deposit-taking institutions. In reaction to the stalled bipartisan bill, Republican Senator John Boozman released an updated version that builds on the delayed market structure legislation, signaling a continued push from some lawmakers to advance regulatory clarity.

Meanwhile, the political landscape saw another development as President Donald Trump announced a potential framework for a deal concerning Greenland following a meeting with NATO Secretary-General Mark Rutte. This geopolitical move led Trump to withhold threatened tariffs on European allies, showcasing a separate policy track unfolding concurrently with the domestic regulatory delays affecting the crypto industry.

The crypto markets exhibited only a minor reaction to the news of the legislative delay. The total market capitalization inched up to $3.1 trillion. Bitcoin recovered from an intraday slump to $87,300, briefly tapping $90,000 in early Asian trading on Thursday before retreating to $89,800. Ethereum prices reclaimed the $3,000 level and held above it. Other assets like XRP, Monero, and Canton posted slightly better gains, but no major sustained moves were triggered by the regulatory news, suggesting the market had partially anticipated further delays.

The postponement of the CLARITY Act underscores the ongoing challenges in crafting comprehensive federal crypto regulation. With the Senate Banking Committee’s focus diverted and key industry support wavering, the timeline for establishing a coherent U.S. digital asset market structure remains uncertain. The introduction of Senator Boozman’s updated bill indicates the issue is not abandoned, but the path to a bipartisan compromise that addresses the concerns of both banking lobbyists and the crypto industry appears longer than many had hoped.