Crypto Market Reform Meets Political Reality Over Speed
- Senate delays crypto market structure reform to protect fragile bipartisan support.
- Stablecoin yield and DeFi oversight disputes slow progress across Senate committees.
- Lawmakers fear rushed markups could fracture votes and doom the bill on the floor vote.
U.S. lawmakers halted momentum on crypto market structure reform after the Senate Agriculture Committee delayed its markup to late January. The decision, announced Monday in Washington, followed weekend bipartisan talks led by Chairman John Boozman. The pause indicates concerns that moving too fast could fracture Democratic support and jeopardize passage requiring 60 Senate votes.
Senate Delays Markup to Protect Bipartisan Support
The Senate Committee on Agriculture, Nutrition, and Forestry postponed its markup from January 15 to the final week of January. Chairman John Boozman said the committee needed more time to finalize details and preserve bipartisan backing. According to Boozman, discussions with Democratic Senator Cory Booker’s team progressed over the weekend.
Notably, the delay avoided dueling markups with the Senate Banking Committee, which still plans to proceed this week. Lawmakers feared similar markups could expose unresolved disputes and weaken alignment before a floor vote.
However, the delay did not pause all activity. The Senate Banking Committee continues preparing amendments to its 272-page draft. Senators must file amendments by Tuesday evening, compressing review time for complex provisions. Democrats previously raised concerns about limited review windows for such significant legislation.
Those concerns surfaced again on Monday. Senators Jack Reed, Tina Smith, and Chris Van Hollen urged Banking Committee Chairman Tim Scott to hold a hearing before markup. They warned the members lacked sufficient time to analyze the draft. The letter described the bill as potentially the most significant financial law considered this century.
Stablecoin Yield and DeFi Oversight Unresolved
Stablecoin rewards and yield are the main concern. The circulating Senate draft leaves that section marked “to be supplied.” Lawmakers continue debating whether dollar-pegged tokens should offer returns linked to reserve earnings. This issue is one of the largest obstacles to bipartisan agreement.
However, the draft does address other areas. It outlines the SEC oversight for securities-related crypto assets, rules on illicit finance, and frameworks for decentralized finance. It also introduces the Senate’s “ancillary asset” definition, absent from the House version passed in May 2024.
If the Senate advances its version, the House must accept it or enter conference negotiations. Both paths require sustained bipartisan cooperation. Lawmakers remain aware that midterm election pressures could narrow the legislative window by the second quarter.
The draft also includes a new section on DeFi oversight. While it stops short of the protections in the Blockchain Regulatory Certainty Act, developers noted safeguards remain partially intact. Industry sources said traditional finance groups sought stricter language, while crypto advocates pushed back.
Related: Lummis Says Crypto Bill Will Split Securities and Commodities
Political Ethics and Vote Math Shape the Timeline
Beyond technical issues, ethics provisions complicate talks. Democrats continue seeking restrictions on senior officials and families owning crypto businesses. The current draft omits such language. These concerns reference President Donald Trump and his family’s crypto ventures, including World Liberty Financial.
According to analysts at TD Cowen, those ties could delay the bill until 2029. Trump-linked ventures reportedly generated hundreds of millions in revenue. Democrats argue clearer guardrails remain necessary before supporting final passage.
Meanwhile, vote math drives strategy. Republicans hold a narrow majority, making Democratic support essential. Observers say leadership fears a rushed bill could fail on the Senate floor. As a result, committees now prioritize durability over speed.
Stakeholders met privately last week to discuss remaining issues. Participants included crypto policy advocates and the Securities Industry and Financial Markets Association. Sources said DeFi treatment and yield-bearing stablecoins dominated discussions. Those talks continue as the January markup approaches.
The Senate Agriculture Committee’s delay keeps negotiations open while preserving momentum. Both committees must still advance their versions before the full Senate can act. For now, lawmakers continue refining language with bipartisan passage as the stated objective.
Meanwhile, the Senate delayed crypto market structure reform to preserve bipartisan support and manage unresolved policy disputes. Lawmakers continue negotiating stablecoin yield, DeFi oversight, and ethics provisions across two committees. The revised January timeline reflects vote requirements, committee coordination, and ongoing bipartisan talks.
