In a dramatic twist within the U.S. Senate, Banking Committee Chair Tim Scott's eagerly anticipated digital asset legislation has hit a major snag. The bill, intended to revolutionize Wall Street regulations to better accommodate crypto token trading, now teeters on the brink of collapse following a powerful opposition from Coinbase CEO Brian Armstrong. This opposition has sent shockwaves through the Senate and the White House, prompting urgent discussions to salvage the legislative effort.

Initially slated for a committee vote this Thursday, the bill's markup has been postponed by Scott amid growing uncertainty about its future. This upheaval represents one of the most significant demonstrations of influence by the crypto industry on Capitol Hill to date, particularly after industry leaders invested heavily in political campaigns to secure a favorable Congress.

Armstrong's sudden dissent centers on recent amendments to the bill, particularly those affecting the authority of the Commodity Futures Trading Commission—a regulatory body preferred by the crypto sector over the Securities and Exchange Commission. Armstrong has also expressed concerns over potential restrictions on stablecoin rewards, which are seen as a competitive threat by traditional banks.

Massachusetts Senator Elizabeth Warren, a vocal critic of the bill, has pointed out the oversized influence the crypto industry seeks to exert over legislative processes. "These are folks who think that when they've bought themselves a Congress, then they expect it to behave the way they say," Warren told POLITICO.

The internal discord among crypto proponents is evident as Armstrong's stance diverges from other major industry players who believe the bill, despite its flaws, should advance. "We’d rather have no bill than a bad bill," Armstrong stated on X, highlighting the industry's readiness to pull support if the legislation does not meet its standards.

Before Armstrong's abrupt opposition, Scott was optimistic about a bipartisan support for the bill, emphasizing the need for clarity on the underlying issues. However, the reaction from Armstrong and the resulting fallout have led some Republicans, like Senator Thom Tillis of North Carolina, to acknowledge the bill might not be ready for a markup as planned.

Additional Congressional Developments:

— Appropriations Update: Senators are poised to pass a three-bill appropriations minibus on Thursday, with optimism for another funding package soon. Senate Majority Leader John Thune has indicated flexibility in handling the remaining funding bills post-recess.

— War Powers Votes: Following a failed effort to rebuke presidential authority in Venezuela, Senator Tim Kaine (D-Va.) disclosed that Democrats will push for votes concerning military actions in several countries, emphasizing the importance of accountability and debate within the Senate.

This unfolding saga in the Senate not only underscores the contentious nature of crypto regulation but also highlights the intricate dance between legislation and lobbying power in U.S. politics. As stakeholders from various quarters watch closely, the outcome of this legislative effort could set a significant precedent for the future of digital assets and their integration into the national economy.

Contributions to this report were made by Meredith Lee Hill, Jordain Carney, and Calen Razor.