Senators recently canceled a markup and vote on a significant crypto bill after Coinbase's CEO, Brian Armstrong, expressed opposition.
Armstrong announced on Twitter that Coinbase could not support the bill due to several concerns, including a reduced role for the Commodity Futures Trading Commission (CFTC) and limitations on crypto companies offering rewards to consumers.
Despite the cancellation, Armstrong indicated that negotiations are still in progress. He believes a vote might be rescheduled in a few weeks.
"We've got a chance to do a new draft and hopefully get back into a markup in a few weeks," Armstrong said.
The latest version of the crypto bill was released late Monday night, catching Coinbase by surprise. Armstrong noted that by the time his team identified the key areas of concern, it was too late to make any changes before the markup.
Banking Committee Chair Tim Scott canceled the hearing just hours after Armstrong’s tweet.
Sen. Cynthia Lummis, a strong advocate for cryptocurrency legislation, expressed her frustration, saying, "I feel like I got run over by a Mack truck."
She has worked on similar legislation for years and believes they can find ways to fix the bill after the break. It could take until February or March of next year to reschedule the vote, according to Lummis.
One of the most significant debates surrounding the bill involves the rewards that crypto companies can offer to stablecoin holders.
The current language in the bill would prevent crypto exchanges from offering interest on stablecoins, although they could provide rewards that function similarly. More than 3,000 banks have signed a petition led by the American Bankers Association, warning that allowing crypto to offer interest-like rewards could result in hundreds of billions being moved from deposits into stablecoins.
A report from the Federal Reserve suggests this could create a credit squeeze of up to $1.2 trillion.
Sen. Angela Alsobrooks from Maryland has spoken with representatives from both the banking and crypto industries. She believes that with more time for negotiations, a compromise can be reached.
"Everyone agrees that there has to be a compromise somewhere in there, and making sure that we are allowing the innovation to grow," Alsobrooks stated.
