HSBC: Coinbase Withdrawal Won’t Kill U.S. Crypto Market-Structure Push

Coinbase’s decision to pull its endorsement of a prominent congressional market-structure draft has increased political friction and complicated plans for near-term markups, but HSBC analysts judge the setback as manageable. The core unresolved issue remains whether Congress will draw statutory lines between securities and commodities oversight or continue to leave those determinations to the courts and agency enforcement. For major custodians, banks and asset managers, even a limited statute that clarifies custody, trading and certain stablecoin mechanics reduces litigation risk and unlocks product development that many firms have held in abeyance. Policymakers and negotiators are now focusing on achievable, committee-level language — particularly in Agriculture or Banking subcommittees — that modestly extends the Commodity Futures Trading Commission’s remit without attempting to settle every contested point. Procedural timing is decisive: negotiators paused or rescheduled markups after ambiguity in recent text and wavering support from at least one major exchange. To address a narrowly technical but politically salient sticking point — whether third-party platforms may offer reward-like incentives tied to tokenized dollar equivalents — the White House has organized a targeted convening next week through its digital-assets advisory council that will bring senior bank, exchange and trade-group representatives together. That meeting, and a scheduled Agriculture Committee markup on Jan. 29, 2026, are intended to generate precise, committee-ready compromises that can be folded into amendments to revive momentum. Behind the scenes, bargaining includes leverage tied to unrelated confirmation calendars: one proposal would make the statute’s effective date conditional on the CFTC having a quorum of commissioners, turning confirmation votes into negotiating chips. At the same time, Judiciary Committee members have formally objected to carve-outs proposed for developers in companion drafts, underscoring intercommittee friction over investigatory and criminal authorities. The administration is pursuing greater interagency coordination — including planned SEC–CFTC engagement — to reduce overlapping jurisdictional signals, but ongoing enforcement actions and prosecutions against developers and non-custodial tools highlight a gap between prosecutorial practice and statutory debate. Industry reaction has been mixed: some firms have withdrawn or withheld endorsements while others intensify lobbying and coalition-building, prompting some project teams to delay large launches even as U.S. spot-Bitcoin products continue to see inflows. International developments, notably Europe’s phased MiCA rollout, are already shaping commercial decision-making and encouraging some teams to orient builds toward jurisdictions with clearer authorization pathways. In short, Coinbase’s retreat raises the threshold for consensus and elongates timetables, but a White House-mediated technical convening, focused committee amendments and confirmation-driven bargaining could still produce targeted statutory fixes that materially reduce operational legal risk for institutional actors.