The US Senate Banking Committee is getting closer to reaching an agreement on a bipartisan bill on crypto market structure, with a vote next week, its chairman said, as industry experts prepare for an attack on the Senate offices on Thursday.
Republicans on the committee are showing broad confidence that their finish line is close to lengthy negotiations over a bill to establish regulated crypto markets in the US. However, Democratic negotiators have generally not weighed in on the rapid timeline that committee Chairman Tim Scott says will conclude with a margin hearing on January 15. A document emerging from Tuesday’s meeting, first reported by Politico, shows that while major sticking points still remain between the parties, numerous Democratic requests have been incorporated.
Many of the key issues Democrats had with the market structure bill as early as last spring, when lawmakers were negotiating stablecoin legislation, still appear to be under discussion, including ethics, how performance is treated, how money transmitters are addressed, the US Treasury Department’s role in policing cryptocurrencies, and protecting developers.
“I think it’s important for us to go on the record and vote,” Scott said in an interview with Brietbart published Tuesday. “So, next Thursday we will have a vote on the market structure. We have worked tirelessly over the past six months and more to ensure we have multiple drafts available to each committee member.”
Everyone agrees that there are a number of important provisions that have not been worked out between the parties, as explicitly illustrated in the document that emerged from the meeting, including ethics demands made by Democrats based on President Donald Trump’s personal crypto ties.
What it also shows, however, is point after point of Democratic requests that were met during the talks. They include items on illicit finance that reflect contributions from the Treasury Department, and a number of provisions were copied from the House Digital Asset Market Clarity Act.
“There is motivation from both Republicans and Democrats to get it done,” Cody Carbone, executive director of the Digital Chamber, said in an interview with CoinDesk on Tuesday. “So I think there’s hope that even if there’s not 100% agreement on a bill, there’s enough support to keep moving forward.”
There is still a way to go
Scott’s long-awaited markup is a massive procedural step that would turn proposed legislation into a bill moving through the actual passage process. Since the House already passed a similar Clarity Act last year, a Senate version would complete the package that, if passed, could end up on Trump’s desk.
However, before that many things will have to happen. First, the committee has to review this marking. A pairing process must then take place in the Senate Agriculture Committee, which has its own important jurisdiction over the cryptocurrency space and a leading regulator of the sector, the Commodity Futures Trading Commission.
Carbone argued that a margin at this stage could better define the final points that Democrats and Republicans need to resolve before the final vote. Other industry lobbyists are more reserved about counting on a successful margin, suggesting that Democrats may strongly resist moving forward before some of their central demands have been addressed.
He said the industry is counting on the group of Democrats who remained at the negotiating table. Carbone says he’s optimistic they will keep the process moving, although the committee’s ranking Democrat, Sen. Elizabeth Warren, is expected to remain in vocal opposition.
The Agriculture Committee has lagged far behind its banking colleagues during this process, although its members tend to make better progress on bipartisan action than Scott’s committee. Once the banking panel acts, those working on the bill believe the other committee will do the same in the coming weeks.
Here’s what would still have to happen:
- Once both committees do markup, a process in which amendments are introduced and debated, the panels vote on whether to advance the legislation.
- If the committees approve that step, their two separate pieces of legislation are combined into a single bill for the full Senate to vote on.
- If the bill clears that major hurdle, it will return to the House, where it is expected to pass by a wide bipartisan margin, like the similar Clarity Act before it.
- Then, a Trump signature would make it law.
lobby pressure
The crypto industry has expressed its opinion at several points throughout the long negotiation, including last month when industry leaders were invited to meet with senators before the December holidays.
But the Digital Chamber is mounting a final push this week, sending executives and other digital asset leaders to Senate offices on Thursday, explaining how important they believe this process is.
“We’re covering the Senate, meeting with as many Senate offices as possible,” Carbone said. “And the goal is to bring together a very diverse group of industry participants to answer any potential questions they have about the market structure bill.” Executives from Binance.US, Unicoin, Anchorage Digital, Crypto.com, and Hedera, among many others, are expected to participate.
However, industry representatives have been careful not to say whether they support the current legislative draft, because it includes vital provisions that have not been fully worked out, including the treatment of decentralized finance (DeFi) and the issue of stablecoins that offer yield or rewards.
Many crypto experts have suggested that failing to address concerns about DeFi oversight could still ruin industry support. Carbone said there has been “real, substantial, bipartisan progress on DeFi.”
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