Coinbase CEO says key crypto vote can be rescheduled after 11th hour cancellation

Senators are promising to move forward on a major crypto bill that would give the industry command of the road after a planned committee vote was derailed at the 11th hour.

But the biggest disagreements have been issues where Democrats, Republicans, the crypto industry and banks have been trying to find common ground for months.

The chances of the latest version of the bill, unveiled late Monday, gaining approval from the Banking Committee were already slim when Coinbase CEO Brian Armstrong tweeted Wednesday afternoon that Coinbase could not support the bill, listing several concerns, including the CFTC’s diminished role and limitations on the cryptocurrency’s ability to offer rewards to consumers in the bill.

“This was the 1,000th death of 1,000 cuts,” Senator Cynthia Lummis told CNBC about Armstrong’s tweet.

A few hours after Armstrong publicly opposed the bill, Banking Chairman Tim Scott, R.S.C., formally canceled the hearing, rescheduling it for an undisclosed date.

Armstrong told CNBC after the new version of the bill was dropped late Monday night that he was surprised by some of its provisions. By the time the Coinbase team identified key areas of concern, it was too late to make any changes to the markup.

“We have a chance to do a new draft and hope to get back into a surge in a few weeks,” Armstrong said.

Lummis said it could take until February or March for the vote to be held again.

“I feel like I was run over by a Mack truck,” said Lummis, one of the biggest crypto advocates on Capitol Hill who has been working on similar legislation for years.

“But after this break, we’ll get back to it and find some ways to fix the bill.”

One of the biggest debates around the bill concerns the rewards companies could offer stablecoin holders. Under stablecoin law, crypto exchanges cannot offer customers interest on stablecoins; but they may offer rewards that act like interest.

Banks say this language could lead to hundreds of billions of dollars being moved from deposits to stablecoins. A Fed report suggests a credit crunch of hundreds of billions of dollars could widen to as much as $1.2 trillion if the stablecoin offers interest.

Armstrong said he wanted to speak directly to bank CEOs about this issue, but argued that the bill should treat both sectors equally.

“Crypto companies should be allowed to compete and offer loans just like banks,” he said.

Banks are also preparing to fight for more positive language. More than 3,000 banks have signed a petition spearheaded by the American Bankers Association that says allowing cryptocurrency to offer interest-like rewards would “drain trillions of dollars from local lending, leaving less money for the car loans, farm loans, mortgages and small business borrowings that drive local economies.”

Sen. Angela Alsobrooks, D-Md., said she has spoken with representatives from the banking and crypto industry and thinks an agreement could be reached soon if there is more time to negotiate.

“Everyone agrees that there has to be a compromise somewhere and that we have to make sure that we allow innovation to grow,” he said.

Caleigh Keating contributed to this article.