US Senate Democrats are reportedly set to reopen talks with representatives from the cryptocurrency industry on Friday, according to people familiar with the plan who speak to CoinDesk.
All this comes less than two days after a last-minute postponement of a key Senate Banking Committee hearing on sweeping digital asset legislation.
The call follows Wednesday night’s abrupt cancellation of the committee’s planned markup of the long-negotiated Crypto Markets Framework Act, which was expected to split regulatory oversight of digital assets between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
The delay came after Coinbase, the largest US-based crypto exchange, withdrew its support for the draft law, citing concerns over stablecoin reward programs and what it considered excessive authority given to the SEC.
Coinbase CEO Brian Armstrong said banks are trying to “kill their competition” with crypto market structure legislation. “Crypto companies should be allowed to compete and offer loans just like banks,” Armstrong said.
Thursday marked a lull in public activity following the cancellation, but lawmakers and industry participants say negotiations are far from over.
Democrats from both the Senate Banking Committee and the Senate Agriculture Committee — which oversees the CFTC — are expected to join Friday’s call, along with representatives from crypto policy advocacy groups in Washington, according to reports.
The banking committee was scheduled to hold an all-day meeting Thursday to debate amendments and vote on whether to advance the bill.
That plan unraveled late Wednesday after Coinbase CEO Brian Armstrong said the company could not support the current version of the legislation. Shortly thereafter, Senate Banking Committee Chairman Tim Scott, RS.C., adjourned the hearing.
Lummis: The Senate is closer than ever
Despite the setback, several lawmakers involved in the negotiations said discussions will continue. In a post on X, Sen. Cynthia Lummis, R-Wyo., a leading crypto advocate in the Senate, said lawmakers were “closer than ever” to reaching an agreement.
“Everyone is still at the negotiating table, and I look forward to working with them [Chairman Scott] delivering a bipartisan bill that the industry — and America — can be proud of,” Lummis wrote Thursday.
Late. Bill Hagerty, R-Tenn., echoed that optimism, saying he remained “confident” lawmakers could reach a consensus “in a short amount of time.”
“I am fully committed to continuing this important work with my colleagues on market structure and look forward to passing legislation that ensures this innovative technology flourishes in the United States for decades to come,” Hagerty said.
Industry reaction to Coinbase’s withdrawal has been mixed. While Armstrong’s comments intensified scrutiny of the bill, other crypto executives and advocacy groups urged lawmakers to keep pushing forward.
Kraken co-CEO Arjun Sethi said abandoning talks now would exacerbate regulatory uncertainty for US crypto firms. “Walking away now would not preserve the status quo in practice,” Sethi said in a post on X. “It would lock in uncertainty while the rest of the world moves forward.”
A key point of contention in recent negotiations has been whether stablecoin issuers should be allowed to offer rewards or return programs — an issue that has drawn pushback from bank lobbyists and some Democrats concerned about consumer protections and competition with traditional deposits.
While the Banking Committee’s markup has been postponed, the Senate Agriculture Committee is still expected to hold a hearing on the legislation on Jan. 27 after previously pushing back its own earlier session. Ultimately, the work of both committees had to be combined before the bill could advance to the full Senate.
Some analysts see the delay as a strategic pause, with Benchmark’s Mark Palmer saying it could help lawmakers build broader bipartisan support and ultimately bolster what he called a potentially historic overhaul of U.S. financial regulation.
Others are more dubious: TD Cowen warned that bridging Democratic demands and Coinbase’s objections could be difficult, especially since some contentious provisions were already concessions to Democrats, while election-year timing and the Senate’s 60-vote threshold add further hurdles.