Despite the rocky start to crypto policymaking this year, it appears at the moment that US policymakers are making progress on the legislative and regulatory fronts. The White House begins new discussions on stablecoin performance with representatives from the banking and crypto industries.
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The story
The Senate Agriculture Committee voted to advance market structure legislation, the White House is directly involved in resolving yield issues, and the SEC and CFTC are once again trying to put crypto rules in place. What we don’t know yet is how quickly these discussions will lead to changes in the Senate Banking Committee’s version of the market structure bill, or even how far apart the different groups are.
Why it matters
The year is still young, but lawmakers appear to be making progress on market structure legislation. Let’s see what happens in February.
Break it down
The White House is convening a meeting of representatives from the crypto and banking industries to start a conversation about stablecoin yield and rewards. The parties involved so far are largely made up of representatives from trade organizations and lobbying groups, although a handful of companies also appear to be sending representatives from their political teams.
The parties will likely discuss what they might be willing to compromise on on the yield issue, and could form the basis for further negotiations as the Senate Banking Committee gets back to negotiating the bill itself.
Of course, performance rewards were only one of many outstanding points of disagreement; there are still anti-money laundering and know-your-customer provisions as they apply to decentralized finance (DeFi), whether regulators will be required to have a quorum of bipartisan commissioners, and whether ethics provisions will be applied to the president (and other lawmakers). Banking Committee members have not yet indicated whether they are making progress on any of these issues. A markup hearing still appears likely to take place in the coming weeks – it’s just not clear when.
Another complicating factor is the Federal Reserve. President Donald Trump has announced his intention to nominate former Fed board member Kevin Warsh as chairman to succeed current Chairman Jerome Powell. The Banking Committee will lead this confirmation process, which will likely take precedence over crypto legislation when it comes into force.
The Senate Agriculture Committee, which was working on its own version of the bill to address the commodity regulation aspect, did not go out of its way to facilitate its banking industry counterpart’s work on partisan concerns.
The committee held an hour-long hearing Thursday to debate a handful of proposed amendments to its version of the Crypto Market Structure Bill, which resulted in the bill advancing on a party-line vote. At the start of the hearing, Democrats said they largely supported the bill, but wanted a bipartisan bill.
The hearing, brief as it was, saw lawmakers reject the proposed amendments, with committee Chairman John Boozman asserting that the Banking Committee had jurisdiction over several of the proposals.
The SEC and CFTC, for their part, are not waiting for Congress to move. Paul Atkins and Mike Selig, the agency’s respective chairs, held a joint conference on Thursday (alongside a joint appearance on CNBC and an article on Fox News). Among their statements on “harmonization” of rulemaking, Selig announced that he was directing the commodities regulator to engage in formal rulemaking on prediction markets and token collateral.
This year, the backdrop remains the prospect of the next elections. Fairshake, one of the crypto-focused super political action committees (super PACs) backed by crypto companies, announced that it has just under $200 million ready to deploy this year, a sum that lawmakers will likely keep in mind as they continue to work on legislation. It remains to be seen whether the financial canon will trump their concerns about the bill.
Monday
- The White House is convening a meeting between representatives from the crypto and banking industries to discuss stablecoin yield and rewards in crypto market structure legislation.
Wednesday
- 3:00 p.m. UTC (10:00 a.m. ET) The Financial Stability Oversight Council, represented by Treasury Secretary Scott Bessent, will present its annual report to the House Financial Services Committee.
THURSDAY
- 3:00 p.m. UTC (10:00 a.m. ET) The Financial Stability Oversight Council, represented by Treasury Secretary Scott Bessent, will present its annual report to the Senate Banking Committee.
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