This time last week, the crypto industry appeared unstoppable in Washington. Now, it’s far from clear where crypto’s agenda will end up in the 119th Congress.
Tensions in both chambers are high and will be on display this week.
Crypto’s long-term fortunes are intertwined with this Congress. Advocates have relearned that fact over the past few days as they push for the integration of digital assets into the regulated financial system.
“There’s a bit of a political football game happening,” Coinbase VP of U.S. Policy Kara Calvert said in an interview Monday night. “I guess we’re a bit of the football.”
Stablecoin stalemate: The Senate is where the struggle is. Democrats have pumped the brakes on the bipartisan GENIUS Act, a bill led by Sen. Bill Hagerty (R-Tenn.) that would regulate stablecoins.
Senate Republicans have vowed to press ahead on a cloture vote later this week despite opposition from a crucial bloc of nine crypto-friendly Democrats.
The Senate can’t pass the GENIUS Act without at least some of those Democrats relenting. Democrats have outlined broad concerns related to the bill’s anti-money laundering controls and issues related to financial stability. Some Republicans may also be wobbly.
“I’ve been back-and-forth with Senator Hagerty about issues related to illicit financing,” Sen. Andy Kim (D-N.J.) said Monday night. “A lot of people have raised different concerns that are out there, so I’m also starting to tune in a little bit more in terms of what my colleagues’ negotiations are.”
Sen. Ruben Gallego (D-Ariz.) led Saturday’s statement opposing the bill. Gallego told reporters Monday night that bipartisan negotiations had been “working continuously” until last week.
“All of a sudden, the rug was pulled from us, and they decided they’re going to call a vote in the middle of negotiations,” Gallego said. Republicans argue the bill has already shifted leftward.
Meanwhile in the House: House Financial Services Committee Chair French Hill’s (R-Ark.) panel is leaping ahead with a discussion draft on market structure reform – the second major crypto priority this year, and a huge undertaking.
There will be drama this morning. With Republicans seeking to hold a joint hearing between the Financial Services and Agriculture committees, Rep. Maxine Waters (D-Calif.) will object to the proceedings before leading her members elsewhere on the Hill to hold a “shadow” panel. The topic: President Donald Trump’s crypto ventures.
Republicans are planning to hold a “joint roundtable” instead. We’ve heard from some Financial Services Democrats who will try to attend at least part of that meeting despite Waters’ plans to walk out.
“Both topics are important. Brutal conflicts of interest are important,” Rep. Jim Himes (D-Conn.) said. “There aren’t many things in crypto as complicated as market structure.”
