Senator Cynthia Lummis (R-Wyo.) said Thursday that the Senate Banking Committee withdrew the crypto bill the day before a scheduled vote due to banks’ concerns about losing deposits, pushing the legislation to the spring.
Why the vote was canceled
Lummis said Maria Bartiromo on Fox that the committee had planned a markup but withdrew it the day before “not only because of what Coinbase had said about it, but because there were other concerns.”
The main concern: Banks and credit unions have committee members who fear losing their deposits if crypto companies can pay interest on stablecoins.
This fear took over Coinbase (NASDAQ:COIN) CEO That of Brian Armstrong public opposition.
Senate Majority Leader John Thune (R-SD) assured Lummis that he would reserve time on the Senate calendar for later this spring, despite the difficulty in securing speaking time.
White House meeting failed
A White House meeting on Monday aimed at breaking the impasse between banks and crypto companies ended without a deal, according to Reuters.
Representatives from the American Bankers Association, the Independent Community Bankers of America, the Blockchain Association and the Digital Chamber were in attendance.
Both sides called it constructive, but fundamental disagreements remain. One source planned subsequent meetings to break the impasse.
The battle of interests for the stablecoin
Banks see this as an existential threat.
If customers can get that kind of return on stablecoins, compared to less than 0.1% on checking accounts, they will move money from banks to crypto.
Banks need these deposits to fund loans to businesses and communities.
Banks have warned that $6.6 trillion in deposits could leave the traditional banking system if crypto companies can offer higher returns.
Crypto companies say rewards are key to attracting customers and banning them would be anti-competitive.
What this means
The spring timetable eliminates hope for near-term regulatory clarity that could unlock institutional capital.
The Senate Banking Committee postponed the vote last month over concerns that the bill lacked support to move forward. The House passed its version in July.
The failure of the bill then occurs Bitcoin (CRYPTO:BTC) is trading down nearly 40% from its October peak, but banks still fear a deposit flight.
This suggests that banks view crypto as a long-term structural threat, regardless of short-term price action.
The spring timetable brings the resolution closer to the time of the 2026 midterm elections, when the political appetite for controversial legislation typically wanes.
Image source: Shutterstock
