US lawmakers are still optimistic about the highly anticipated Clarity Act, despite the reading being put on pause just hours before it was scheduled.
The US Senate has suspended the scheduled reading of the Digital Asset Market Structure Clarity Act after Coinbase pulled its support for the bill.
The decision, announced on January 14, pauses the bill, which aims to establish a clearer regulatory framework for digital assets in the US, including oversight of crypto markets, stablecoins and intermediaries, as well as the division of authority between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
The Clarity Act had been expected to advance through Senate committees this week, with a markup scheduled for January 15. However, the timetable had already faced several objections from a group of Democratic senators, who called for a full public hearing before any vote.
With the reading now pulled, it remains unclear when the bill will return to the Senate agenda or whether further changes will be made before it does.
Supporters of the legislation argue it would bring certainty to the US crypto market by embedding digital assets within existing financial and anti-money laundering frameworks, clarifying custody and bankruptcy treatment for customer assets.
However, the pause follows growing problems within the crypto industry itself, with Coinbase withdrawing its backing of the bill just hours before the Senate’s decision.
Coinbase steps back
Brian Armstrong, Co-founder and CEO of Coinbase, said the exchange could not support the current draft after reviewing the latest draft of Senate Banking Committee text released this week.
“After reviewing the Senate Banking draft text over the last 48hrs, Coinbase unfortunately can’t support the bill as written,” Armstrong posted on X.
He highlighted a number of concerns, including what he described as a de facto ban on tokenised equities, provisions affecting decentralised finance which he argued would undermine financial privacy and draft amendments which could eliminate rewards on stablecoins by allowing banks to restrict competing products.
Armstrong also warned the bill would erode the CFTC’s authority, shifting power toward the SEC in a way he said would stifle innovation.
“We’d rather have no bill than a bad bill,” he said, adding the proposed framework would be “materially worse than the current status quo”.
Despite pulling support, Armstrong stressed his company remains engaged with lawmakers and optimistic a revised version could emerge. “Crypto needs to be treated on a level playing field with the rest of financial services so we can build this industry in a safe and trusted way in America,” he said.
“I’m actually quite optimistic that we will get to the right outcome with continued effort. We will keep showing up and working with everyone to get there.”
Ripple takes a different view
Coinbase’s issues with the bill aren’t shared by everyone, including Ripple, which has continued to publicly support the Clarity Act despite the ongoing debate.
Ripple CEO Brad Garlinghouse has described the bill as a “massive step forward” for the industry, asserting regulatory clarity is preferable to the uncertainty which has defined the US crypto market for years.
“Ripple (and I) know firsthand that clarity beats chaos, and this bill’s success is crypto’s success,” Garlinghouse said, referencing the company’s legal battle with the SEC.
While acknowledging negotiations behind the scenes, including more than 130 proposed amendments, Garlinghouse has indicated Ripple intends to remain engaged in the legislative process rather than withdrawing support.
He has said the company is “optimistic that issues can be resolved through the mark-up process” and praised the bill for offering what he views as workable regulatory frameworks while maintaining consumer protections.
Lawmakers stress this is just a pause
Senator Tim Scott, who has played a key role in designing the market structure proposal, aimed to calm concerns following the Senate’s decision to halt the reading.
“I’ve spoken with leaders across the crypto industry, the financial sector, and my Democratic and Republican colleagues, and everyone remains at the table working in good faith,” Scott posted on X.
Describing the delay as a “brief pause”, Scott said the bill indicates months of bipartisan negotiations and input from innovators, investors and law enforcement, with the goal of delivering “clear rules of the road” which protect consumers and keep financial innovation in the US.
David Sacks, the White House AI and Crypto Czar, shared a similar stance, saying passage of market structure legislation “remains as close as it’s ever been”.
“The crypto industry should use this pause to resolve any remaining differences,” Sacks said. “Now is the time to set the rules of the road and secure the future of this industry.”
