The hints were there all week that the bill might be in trouble. On Tuesday, shortly after the text was released, someone told me, "I think this bill might be f*****." Less than 48 hours later, the Senate Banking Committee's chairman, Senator Tim Scott, announced he was postponing the markup hearing.
The Senate Banking Committee's market structure bill isn't dead. The markup hearing is a key step in the process, but it's not insurmountable. As a reminder, the GENIUS Act governing stablecoins had a few major public failures during votes last year but was still signed into law last summer.
But still, the process for getting market structure legislation has proven contentious. Lawmakers on the Banking Committee have had issues with how stablecoin yield would be addressed and whether there would be an ethics provision governing the president's crypto ties.
Bipartisan senators from another committee entirely took issue with the inclusion of a provision governing software developers and giving them certain legal protections, according to a letter written on Wednesday but publicly reported Friday.
The crypto industry has its own complaints with the bill, pointing to issues ranging from how it grants authorities to the Securities and Exchange Commission to what sort of decentralized finance regulations it sets up.
"It seems all parties heavily involved in the negotiations are close to getting onboard," said Ron Hammond, head of Policy and Advocacy at Wintermute. "As we've seen though, those hang-ups in the bill range from senator to senator."
However, the bill still has momentum, he said.
"Considering all the domestic and geopolitical events that have occurred in the past few months, it is telling that the market structure bill is still seen to have legs this Congress," Hammond said.
The Senate Agriculture Committee is supposed to release its own text and hold a markup in the coming weeks, and that text's release could suggest where the overall bill might land, he said.
The Agriculture Committee was said to want the Banking Committee to proceed with a markup first, but if it does wind up that Agriculture moves first, it might spur the banking panel to proceed with a markup regardless of where the bill stands.
For its part, the Banking Committee does appear to be working on updating the draft text. Democrats held a call with industry representatives on Friday to relaunch discussions.
The next items to watch for include what sort of negotiations begin and whether it looks like any compromises are being reached on the main issues listed above. It does appear that all of the parties are still working on the bill, suggesting strongly that we'll see another markup sooner or later.
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