Senate Democrats haven’t fled the negotiating table for the legislation to finally regulate the U.S. crypto industry, but frustrations are evident as a new draft is being speed-written as the weekend approaches.
The Senate Banking Committee has assured the industry it’ll get its markup next week, which requires that an official notice goes out by Friday night. Its partner on the bill — the Senate Agriculture Committee — has reportedly been trying to get on the same schedule for a committee vote, though it’s uncertain whether the top Democrat negotiator on that panel is ready.
For his part, Senator Tim Scott, the chairman of the banking panel, has signaled that he’s going forward ready-or-not on January 15 with a markup hearing — a session in which the lawmakers can discuss amendments before deciding whether to advance the bill to the overall Senate. But he’ll need an actual bill to work on before next week gets underway, so staff has been churning out the language.
Top Republican negotiator Senator Cynthia Lummis teased the process on Friday by posting a picture of what appears to be the first page of the working draft of the Responsible Financial Innovation Act. Her post, which said she has some reading to do, suggests the draft language may be coming together.
People familiar with the negotiations have said that a resistant Senator Cory Booker, the New Jersey Democrat who has led his party in Agriculture Committee talks with Republican Chairman John Boozman could end up delaying that panel from next week’s plan. A Booker aide referred CoinDesk to Boozman’s office on the timing of the markup.
“Chairman Boozman remains committed to advancing a bipartisan bill and good-faith discussions are continuing,” a spokesperson for the committee told CoinDesk in a statement.
For the Senate to ultimately approve a bill that President Donald Trump can sign into law, the advocates need to keep seven Democrats on board. Though the legislative talks have stretched back for months, some of the Democrats’ central requests hadn’t yet been addressed, including that the bill block senior government officials from profiting off of the crypto sector — most notably, a heavily crypto-involved Trump.
One of the leading Democratic lawmakers in the talks, Senator Ruben Gallego, told Punchbowl that this demand represents a red line, meaning it must be satisfied if he’s going to support the end product. “They need to get it right, or they’re not going to have enough votes to pass this thing,” Gallego was reported to have said.
Though tensions may be high between the parties, the fact that they’ve sustained bipartisan talks to write legislation is an unusual mark of wide congressional support for doing something about crypto. Crypto insiders remain impressed at the seriousness of Democrats who’ve stayed at the table, despite the resistance from others in the party to work on digital assets regulation.
“It’s important for folks to realize that the Democrats have been putting so much time and effort into this,” said Talia Davis, vice president for government relations at the DeFi Education Fund, in an interview with CoinDesk.
If the two committees pass related crypto market structure bills, the legislation would be combined for an overall Senate vote. That bill would be expected to easily clear the House of Representatives and become law. But the Senate’s Democratic support remains in question.
Apart from the talks between Democrats and Republicans, the crypto industry has been battling it out with traditional finance lobbyists who have pushed back on such things as stablecoin yield and decentralized finance (DeFi) protections. So, the pending draft from the Banking Committee could answer a lot of questions and potentially disappoint players who are necessary for final passage.