Ahead of a key vote in the Senate Banking Committee on a crypto market-structure bill, tentatively scheduled for next week, rival stakeholders met Thursday to try to hash out their differences to allow the bill to pass. The meeting produced glimmers of “progress” toward a compromise on the issue of decentralized finance, or DeFi, referring to crypto-native platforms that enable direct trading of assets without an intermediary. SIFMA has opposed regulatory carveouts in the bill for DeFi services and developers. But one source described Thursday’s talks as “constructive” and “productive” on the DeFi question.
Crypto industry leaders participating in the meeting, including an executive from venture capital giant Andreessen Horowitz and a representative from the DeFi Education Fund sought to persuade SIFMA to drop or moderate its opposition to the carveouts, which have been accepted by some pro-crypto senators from both sides of the aisle. On Thursday, more than 50 members of the Digital Chamber trade association met with senators and White House officials to press for DeFi-friendly language to be preserved in the bill. Another contentious issue in the discussion is a push by banking industry groups to retroactively close what they perceive as a loophole in the GENIUS Act passed last year that allows dollar-pegged stablecoin issuers to circumvent the law’s prohibition on paying interest or other incentives to coin holders. The market-structure bill is a companion to the Clarity Act passed by the House last year.
But it has run into opposition in the Senate, mostly along partisan lines. The ranking member of the Banking Committee, Sen. Elizabeth Warren (D-MA), has objected to what she views as insufficient consumer and investor protections in the measure and has joined other Democrats demanding limits on crypto dealings by the Trump family and members of the Trump administration. Most stakeholders agree that bipartisan support for the measure in the Banking Committee is essential for the measure to have a chance of making it to the Senate floor for a vote by the full chamber. Even then, however, differences between the Senate bill and the Clarity Act would need to be reconciled before a bill could go to the president’s desk.
Committee chairman Sen. Tim Scott (R-SC) has scheduled the vote for January 15, putting pressure on the negotiators to iron out their differences quickly, and angering some stakeholders who fear the accelerated timetable could derail the talks. “I can’t believe we finally have Democrats and Republicans proactively working on something, and we are going to potentially jeopardize it for an arbitrary timeline,” one insider said.
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