Senator Cynthia Lummis indicated that the Senate Banking Committee’s planned markup of the crypto market-structure draft commonly referred to as the CLARITY Act may be postponed due to unresolved disagreements over key provisions. The focal friction point was language governing stablecoin yields and related market mechanics.
The potential delay followed a visible shift in industry positioning, which increased the likelihood that lawmakers will pause the markup to rework contested sections. The combination of committee-level pushback and public industry pressure made a clean, near-term vote harder to operationalize.
Lummis tells me her recommendation and expectation is that the markup be pulled for now. It’s Banking Chair Tim Scott’s call.
— Steven Dennis (@StevenTDennis) January 14, 2026
Stablecoin rewards are the flashpoint
Lawmakers were described as sharply divided on how the bill should treat stablecoin reward mechanisms, a design choice that directly intersects with banking incentives and on-chain market structure. That dispute is material because it touches both consumer-facing product economics and institutional risk controls.
Coinbase then publicly withdrew support, calling the current draft “worse than no legislation at all,” and argued the text would materially change how parts of the ecosystem function. The withdrawal created a high-visibility signal that some market participants view the current language as operationally restrictive.
Beyond stablecoin rewards, the disputed areas discussed in the draft included potential prohibitions on tokenized equities, expanded surveillance measures affecting decentralized finance users, and tighter limits on reward-driven stablecoin designs. Taken together, these elements concentrate policy risk into a few high-impact clauses rather than diffuse regulatory fine print.
Industry alignment is splitting, not converging
Coinbase stepping back also highlighted a fracture among large centralized platforms and other stakeholders as the policy trade-offs became clearer. At the same time, Kraken and Ripple were described as reaffirming support for the legislation in its current or amended form, underscoring the sector’s internal divergence on acceptable constraints.
For protocol engineers and product teams, the contested provisions translate into practical build-versus-block decisions: restrictions on stablecoin yields can reshape liquidity incentives, broader surveillance expectations can change privacy and routing architectures, and tokenized-equity limits can constrain token engineering and custody workflows. Each pathway has measurable downstream impact on settlement patterns and integration choices across L1/L2 stacks.
The market impact was framed as immediate in sentiment terms, with the withdrawal of a major exchange’s endorsement reducing confidence for some institutional participants and potentially slowing allocation into new tokenization initiatives until legal exposure is clearer. Meanwhile, firms still supportive have incentives to push for amendments that preserve core business models while keeping a regulatory pathway alive.
