The U.S. Senate Agriculture Committee, which oversees commodity trading, advanced a bill on Thursday aimed at establishing a federal regulatory framework for cryptocurrencies through a strictly partisan vote. This outcome indicates the legislation likely lacks the broad support needed for passage in the full Senate. If enacted, the bill would grant the U.S. Commodity Futures Trading Commission (CFTC) authority to oversee the spot cryptocurrency market and establish rules for digital commodity exchanges, brokers, and dealers.
Concurrently, a companion bill in the U.S. Senate Banking Committee is attracting significant attention due to its more contentious nature. A fierce lobbying battle has erupted between traditional banking institutions and cryptocurrency firms over whether crypto companies should be permitted to pay interest on stablecoins, which are cryptocurrency tokens pegged to the U.S. dollar. The cryptocurrency industry emphasizes that the U.S. crypto market structure bill is of strategic importance for its future development. It is seen not only as providing a crucial framework of legal certainty for business operations but also as a cornerstone for building a compliant digital asset ecosystem.
To secure the passage of this landmark legislation, the industry has invested heavily in the 2024 election cycle, backing pro-cryptocurrency candidates in a strategic political maneuver to achieve a legislative breakthrough. The industry asserts that the bill is vital for its future and provides essential legal clarity for businesses. The House of Representatives passed its version of the bill in July of last year.
To ultimately reach President Donald Trump's desk for approval, the bill would need to secure support from at least seven Democrats in the full Senate vote. However, some Democrats have expressed concerns, arguing the measure lacks provisions to prevent political figures from profiting through cryptocurrency speculation. On Thursday, no Democratic members of the Senate Agriculture Committee voted to advance the bill.
Senator Cory Booker, the committee's top Democrat, stated he wanted to see more provisions related to decentralized finance. He noted that his discussions with other committee members on this issue were not reflected in the final bill. "This bill is so close to the red zone, and it's frustrating to me that I see a glide path of bipartisanship to land this plane and go straight into the end zone," Booker remarked before the vote, using a mix of football and aviation metaphors.
The White House is scheduled to meet with banking and cryptocurrency industry executives next Monday to discuss the path forward for crypto legislation within the Senate Banking Committee, which has not yet held a vote on advancing its bill.
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