Market Structure Bill Stalls in U.S. Senate, Markets Rattled as Uncertainty Grows

▲ Bitcoin (BTC) Regulation / ChatGPT-generated image

The U.S. cryptocurrency regulatory framework known as the “CLARITY Act” (U.S. Crypto Market Structure Bill) passed the House of Representatives swiftly, but its progress in the Senate has been delayed due to partisan disagreements and industry backlash.

According to crypto media outlet Cointelegraph on February 16 (local time), the CLARITY Act, first introduced in May 2025, aims to redefine rules across the digital asset industry, from establishing supervisory authorities to regulating decentralized finance (DeFi). The bill moved quickly through the House, passing last July by a wide margin of 294 votes to 134. However, since being introduced in the Senate, it has stalled amid political disputes between Democrats and Republicans and conflicting views among stakeholders.

Democratic members of the Senate Banking Committee are calling for bipartisan legislation that includes strengthened ethics rules and provisions banning government bailouts. In particular, Senator Elizabeth Warren has voiced strong concerns over tax benefits for digital assets and their potential use in illicit money laundering. In contrast, Republicans and the crypto industry argue that rather than forcing digital assets into the existing regulatory system, a tailored framework reflecting the industry’s unique characteristics should be designed.

Opinions are also divided within the industry. Coinbase, the largest U.S. cryptocurrency exchange, has clearly opposed provisions that would ban interest-bearing stablecoins and designate the U.S. Securities and Exchange Commission (SEC) as the primary regulator. Meanwhile, lobbying groups representing traditional banks support tighter regulations, arguing that stablecoin interest payments could threaten financial system stability, further complicating the bill’s passage.

The longest U.S. federal government shutdown on record, which lasted from October to November last year, also contributed to delays in reviewing the legislation. David Sacks, the Trump administration’s Secretary for Cryptocurrency and AI, had announced a Senate Banking Committee markup session in January, but the schedule was postponed as substantive agreement between the crypto industry and the banking sector failed to materialize. Recently, key industry executives, including Ripple Chief Legal Officer Stuart Alderoty, met at the White House to seek solutions, but a final agreement has yet to be reached.

The cryptocurrency market is currently experiencing negative effects from the uncertainty caused by the legislative delay, with approximately $1 billion in capital outflows reported. Experts note that with the 2026 midterm elections approaching, lawmakers may seek to accelerate the bill’s passage before campaign season intensifies, aiming to appeal to voters and secure support from crypto political action committees (PACs). The bill’s ultimate fate is expected to hinge on political negotiation and the race against time.

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