Lede
The US Senate Agriculture Committee has officially rescheduled its markup of the crypto market structure bill, pushing the legislative proceeding to the end of January. Committee Chairman John Boozman announced the decision on Monday, indicating that the committee requires additional time to finalize remaining details and secure the broad bipartisan support necessary for the bill’s advancement. The markup is now specifically slated to occur during the last week of January. Chairman Boozman emphasized that while constructive discussions have taken place and meaningful progress has been made, more time is essential to ensure the legislation reflects a bipartisan consensus. This move delays a critical step in the development of a unified regulatory framework for the digital asset industry in the United States.
The digital asset sector is highly anticipating these developments, as the bill is intended to clarify the respective roles of the nation’s primary market regulators, including how the Securities and Exchange Commission and the Commodity Futures Trading Commission will police crypto. By delaying the markup, the committee aims to strengthen the legislative foundation before the bill moves forward in the legislative process. The focus remains on creating a framework that can garner wide-ranging approval within the Senate, addressing both regulatory oversight and market stability. This delay underscores the complexity of balancing various stakeholder interests while seeking to establish a clear set of rules for the rapidly evolving cryptocurrency market.
Context
The proposed legislation is central to defining the regulatory boundaries between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Currently, the Senate Agriculture Committee maintains oversight of the CFTC, while the Senate Banking Committee is responsible for overseeing the SEC. This jurisdictional division is a key component of the market structure bill as it seeks to delineate how these two agencies will police the cryptocurrency market. It is important to note that the bill currently under consideration in the Senate is entirely separate from the House’s CLARITY Act, which was passed by the House of Representatives earlier in July. This separation is largely due to specific procedural rules that govern the legislative process between the two chambers of Congress.
The crypto industry has expressed significant anticipation for this bill, as it represents a major effort to provide much-needed regulatory clarity for various market participants. The coordination between various Senate committees, including the potential for concurrent markups, highlights the multifaceted nature of digital asset regulation. While the Senate Agriculture Committee has pushed its timeline back, the goal remains to address the complex interactions between different regulatory bodies. Understanding the relationship between these committees and their respective oversight responsibilities is crucial for comprehending the broader impact of the proposed market structure legislation on the domestic financial landscape. Defining these roles is essential for creating a predictable environment for digital asset businesses operating within the United States.
Impact
The bill is currently the subject of intense negotiation involving various lobbyists and political factions, with several significant amendments being considered. One major area of focus involves a proposed ban on all stablecoin yield payments, a change that lawmakers and lobbyists are actively pushing to include in the final text. Furthermore, bank lobbyists have advocated for a specific prohibition that would prevent third-party platforms, such as cryptocurrency exchanges, from offering stablecoin yields. This push follows the GENIUS Act, which already prohibited stablecoin issuers from providing such yields. On the political front, a group of Democratic Senators is advocating for the inclusion of strict conflict-of-interest guardrails within the legislation.
These provisions would prohibit public officials, including high-ranking figures such as President Donald Trump, from profiting from any personal or professional connections to cryptocurrency companies. Conversely, the crypto industry itself is engaging in significant lobbying efforts to shape the bill’s definitions and scope. Industry groups and digital asset companies are pressing lawmakers to exclude software developers and non-custodial platforms from being classified as financial intermediaries. This classification is a critical point of contention, as being labeled an intermediary would subject these entities to traditional finance rules and oversight. These competing interests demonstrate the high stakes involved in the bill’s final language, which will ultimately determine the operational environment for both established financial institutions and emerging decentralized technology providers.
Outlook
Despite the ongoing efforts to advance the legislation in the Senate, some market analysts suggest a much longer timeline for the bill’s ultimate passage and implementation. Investment bank TD Cowen has indicated that the bill is more likely to achieve final passage in 2027, several years after the current deliberations scheduled for the end of January. According to this projection, the final implementation of the regulatory framework would not occur until 2029. This outlook suggests that the legislative path forward may be fraught with delays and shifting political priorities over the coming years. The industry’s anticipation remains high, but the prospect of a multi-year delay highlights the challenges of achieving legislative consensus on digital asset market structure.
As the Senate Agriculture Committee prepares for its markup in the last week of January, the focus will be on whether the committee can successfully incorporate the various requests from lawmakers, bank lobbyists, and crypto industry advocates. The outcome of the January markup will serve as a significant indicator of the bill’s momentum and its ability to bridge the gap between different regulatory philosophies. While the immediate focus is on the upcoming committee action, the long-term trajectory of the bill will be influenced by broader political dynamics and the evolving nature of the global cryptocurrency market. The contrast between the current push for a January markup and the extended timeline predicted by analysts underscores the uncertainty surrounding the future of comprehensive crypto regulation in the United States.
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