Coinbase’s (COIN) decision to end its support for U.S. market structure legislation will not derail the process, investment bank HSBC said, suggesting that while CEO Brian Armstrong prefers no bill to a bad bill, he would likely agree to a reasonable compromise.
The report argues that a legislative foundation is essential to ensure the stability required for entry into institutions.
“Coinbase’s withdrawal of support does not spell the end of U.S. market structure legislation,” analysts Daragh Maher and Nishu Singla said in Tuesday’s report.
At its core, the proposed law is a high-stakes attempt to end the era of regulation by enforcement that has defined the U.S. crypto landscape for years. Drawing a clear line between the authority of the Securities and Exchange Commission (SEC) over securities and that of the Commodity Futures Trading Commission (CFTC) When it comes to commodity oversight, the bill aims to provide the legal rules that institutional investors, from hedge funds to corporate treasuries, need before entering the market on a large scale.
Earlier this month, Armstrong said Coinbase had dropped its support for the bill aimed at protecting consumers and preventing market competition from being stifled. The Senate Agriculture Committee delayed assessing the structure of the crypto market until Thursday, citing travel disruptions following a major weekend winter storm.
Analysts have highlighted a division of sentiment in favor of action: Ripple executives continue to argue that “clarity is always better than chaos.” This is reinforced by the massive financial influence of the Fairshake PAC.
Additionally, analysts noted that advisors believe the current draft, while imperfect, could be more favorable than future versions under different political administrations.
Even if no resolution is reached, analysts expect a gradual victory through the Agriculture Committee’s bill, which would strengthen market integrity through CFTC oversight.
The bank cautioned against viewing the industry’s pushback as a dead end, citing the GENIUS Act’s survival despite similar legislative hurdles.
Matt Hougan, CIO of Bitwise, argued that market structure legislation is key to codifying the current pro-crypto environment into law. Without this, he warned, the sector remains exposed to changing administrative priorities, a position that matches HSBC’s outlook.
Learn more: Crypto faces crossroads as Clarity Act support wavers, says Bitwise
