Senate Republicans Push Forward With Crypto Bill Despite Lack of Democratic Support

TLDR

• Senate Agriculture Committee Republicans released a draft crypto market structure bill without Democratic support, with markup scheduled for January 27
• The bill protects DeFi developers and non-custodial interfaces from CFTC regulation while focusing on intermediaries that control custody or execution
• Senate Banking Committee postponed its crypto bill indefinitely after Coinbase withdrew from the process last week
• Democrats and Republicans remain divided on fundamental policy issues including stablecoin reward provisions
• White House and committee Republicans want the crypto and banking industries to resolve stablecoin disputes before moving forward

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The Senate Agriculture Committee released a Republican draft of its crypto market structure bill on Wednesday. The draft moves forward without Democratic backing as lawmakers remain divided on key policy issues.

Committee Chairman John Boozman confirmed that Republicans have not reached agreement with Democrats on several fundamental policy matters. The markup hearing is scheduled for Tuesday, January 27.

The legislation aims to establish a regulatory framework for crypto markets. It would clarify how the Securities and Exchange Commission and the Commodity Futures Trading Commission oversee digital assets.

Developer Protections and DeFi Rules

The Republican draft includes protections for decentralized finance developers and certain service providers. Crypto attorney James Murphy said the bill creates a pathway for DeFi to avoid CFTC regulation.

The legislation does not regulate self-custody wallets or non-custodial DeFi interfaces. Instead, it focuses on platforms that take custody of assets or control execution.

Bill Hughes, a lawyer at Consensys, explained that the bill targets intermediaries rather than protocols or individual users. The draft does not include stablecoin yield regulation, which falls under the Banking Committee’s jurisdiction.

Banking Committee Delays

The Senate Banking Committee has postponed work on its own crypto market structure bill indefinitely. The delay came after crypto exchange Coinbase withdrew from the legislative process last week.

Three sources familiar with the situation said the committee will not return to crypto legislation for several weeks. Committee Republicans and the White House want Coinbase and the broader crypto industry to resolve disputes with the banking sector first.

The main point of contention involves stablecoin reward provisions. The Banking Committee plans to focus on housing policy instead, following President Trump’s recent calls for institutional investors to reduce their housing investments.

Senator Boozman acknowledged the divisions with his Democratic counterpart, Senator Cory Booker. Even if the Agriculture Committee advances its bill, it will need Democratic support and coordination with the Banking Committee to progress through the full Senate.

Patrick Witt, the White House executive director for the President’s council on digital assets, defended the current legislation. He said compromises will be necessary to secure 60 Senate votes.

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