Why Bad Crypto Bills Turn Out to Be Good News for DeFi

Last week’s delay in discussing the crypto market structure bill in the US Senate appeared to be a heavy blow to the industry. However, decentralized finance sector leaders see this as a strategic negotiation advantage rather than a defeat. This dynamic reveals the true meaning of “bad” in the context of crypto policy – sometimes, halting harmful legislation is more valuable than passing imperfect laws.

Delay is not defeat – The real meaning of bill failure

When Coinbase suddenly withdrew its support for the bill a few hours before the vote, the market reacted negatively. Early analysts saw this as a major setback for the crypto community already fighting for a long-term regulatory framework. But this interpretation is too narrow.

The true meaning of this delay is that the industry is choosing to avoid overly strict regulation rather than accepting bad laws in the short term. The negotiation dynamics are reversed from conventional expectations – lawmakers pushing for tight oversight actually need this bill more than the DeFi sector, at least to maintain regulatory momentum.

DeFi leaders welcome this hurdle as a negotiation opportunity

Mike Silagadze, founder of Ether.fi, openly states that the bill delay is positive news. The reason is simple: the current version would impose significant restrictions on stablecoin holdings and unnecessarily limit DeFi innovation. “There’s no reason to rush into bad regulation,” he emphasizes.

This view is reinforced by Bill Hughes, senior regulatory advisor at Consensys, who sees the delay as a clear negotiation message. Lawmakers now understand that if they want to pass a framework, they need to offer provisions that do not overregulate decentralized technology. This logic shifts the power structure in legislative negotiations.

What will change in the next version of the bill

Senator Tim Scott’s Committee Chair has stated that all parties remain at the negotiation table in good faith. The key point here is that Coinbase and other industry leaders have shown their willingness to step back, emphasizing that they prefer no regulation over bad regulation. This message is clearly received by senators pushing for strict oversight.

The upcoming bill revision is expected to reduce restrictions on decentralized token holdings and allow more room for DeFi innovation. Brad Garlinghouse of Ripple has indicated that this delay is a golden opportunity to redesign proposals more carefully, with full support from the crypto community this time.

Meanwhile, the crypto ecosystem continues to grow despite regulatory uncertainties. Projects like Pudgy Penguins demonstrate strong momentum in transforming NFTs into sustainable IP platforms, with millions of users and hundreds of millions of dollars in valuation. The PENGU token distributed to millions of wallets proves that innovation continues independently of legislative status.

Lessons for the future

True victory in this context is not about passing or stopping a bill – it’s about understanding the real meaning of “bad” in crypto regulation. Bad legislation can hinder the entire sector for years, while delays open space for more thoughtful redesigns.

DeFi communities and industry leaders have shown they are willing to stand firm to protect decentralized innovation. This lesson will shape all future crypto regulation negotiations – that no compromise is worth sacrificing the technological foundations that make crypto meaningful.