Crypto Industry Is Pushing a Bill to Tilt Regulation in Its Favor

“Since President Trump took office last year, the cryptocurrency industry has notched a series of political victories, escaping lawsuits, negotiating business-friendly policies and persuading the White House to create a national Bitcoin stockpile.

 

Now the crypto world is focused on its most ambitious aim: the passage of a 309-page bill that would create a sweeping regulatory framework for digital currencies, shaped in part by the industry itself.

 

The Senate Banking Committee is scheduled to vote on the bill’s latest draft on Thursday, a crucial procedural step after the House approved a version of the legislation last summer. A successful committee vote would pave the way for the bill, known as the Clarity Act, to reach the Senate floor this year.

 

But its fate is far from assured. The legislation has proved highly contentious, pitting the crypto industry against the powerful banking lobby, with enormous stakes for the future of financial regulation.

 

Crypto executives spent tens of millions of dollars to help elect sympathetic legislators in 2024, then descended on Washington to advocate the industry’s interests in Congress.

 

The result is a bill that would make it easier for crypto firms to declare that digital currencies are not securities governed by the strict system of oversight that applies to stocks and bonds on Wall Street.

 

During discussions in Congress, Democrats have voiced fears that the bill would gut the government’s enforcement powers over a fast-growing sector in which Mr. Trump’s family has become a major player.

 

“This bill puts investors, our national security and our entire financial system at risk — and it will turbocharge Donald Trump’s crypto corruption,” said Senator Elizabeth Warren of Massachusetts, the ranking Democrat on the Banking Committee, in a statement this week.

 

The bill has followed a winding path through Congress. The Senate committee was scheduled to consider an earlier version in January, only for the giant Coinbase crypto exchange to pull its support at the last minute, prompting legislators to cancel the vote. The company was concerned about a proposal, pushed by the banking industry, that would have outlawed one of its crypto products.

 

A series of negotiations brokered by the White House put the bill back on track, though banking trade groups have continued to voice concerns, arguing that the current language would permit products that compete with traditional bank accounts.

 

In interviews, crypto executives said the bill was a crucial step in making the United States more hospitable to the industry. If control of Congress shifts in the midterm elections this fall, it could become much harder for the industry to secure legislation.

 

The vote this week is a “key window of opportunity,” said Summer Mersinger, the chief executive of the Blockchain Association, a crypto trade group.

 

The discussions in Washington cap years of lobbying and political spending by the crypto industry.

 

During the 2024 election, a network of political action committees financed by crypto firms spent more than $130 million to try to elect Democrats and Republicans who had voiced support for the industry. Within a few months, Congress passed the GENIUS Act, which created industry-friendly rules for stablecoins, a type of digital currency designed to maintain a price of $1.

 

In July, with the administration’s support and a vote of 294 to 134, the House passed its version of the Clarity Act, which granted many items on the industry’s wish list.

 

At the heart of the legislation are rules that would divide authority to police crypto between the Securities and Exchange Commission and the Commodity Futures Trading Commission, a smaller and less aggressive regulator.

 

The industry is pushing for a framework that would shield crypto companies from the onslaught of lawsuits and investigations that began during Mr. Trump’s first term and escalated under President Joseph R. Biden Jr. That enforcement effort, orchestrated by the S.E.C., was aimed at forcing crypto firms to disclose information to investors and subject themselves to rigorous federal oversight, much like companies that issue stocks.

 

Mr. Trump ended most of the enforcement last year, a change that disproportionately benefited companies that had donated to his political causes or forged ties with his family’s crypto businesses. Legislation could help cement that regulatory retreat by making it difficult for a future administration to bring comparable lawsuits.

 

“This finally will create that permanent framework,” said Cody Carbone, the chief executive of the Digital Chamber, a crypto trade group. “It gets really hard for the next administration, whether it’s Republican or Democrat, to really change too much about it.”

 

Senate Democrats have expressed alarm. They have pushed for ethics rules to limit elected officials from “issuing, endorsing or profiting” from crypto, a response to the Trump family’s network of digital currency ventures. And fierce debates have erupted over arcane subjects like decentralized finance and yield-bearing stablecoins.

 

“We’ll probably see a rather partisan vote,” said Kevin Wysocki, the head of policy at Anchorage Digital, a crypto firm. “It’s quite normal, actually, to have some points that are more contentious that need a bit more time.”

 

The legislation has faced serious resistance in the Senate.

 

Before the expected committee vote in January, banking groups pushed for a significant revision to the bill. They wanted to stop crypto exchanges from paying interest to people who own stablecoins — a service that Coinbase offers. The banks worried that customers would empty their deposit accounts and switch to stablecoins, a potential threat to the banking system.

 

Coinbase was not happy. “We’d rather have no bill than a bad bill,” the company’s chief executive, Brian Armstrong, wrote on X.

 

After the January vote was canceled, the White House hosted negotiations between crypto firms and the banking industry to hash out a solution. Coinbase appeared to be pleased with the new bill, which would allow certain forms of yield while prohibiting others.

 

“It’s clear that this is a strong compromise and a result of hard work from all parties involved,” Faryar Shirzad, the company’s chief policy officer, posted on social media on Tuesday. He added, “We can’t wait for the bill to move forward this week.”

 

But the language remains subject to change. Banking groups have argued that it offers too much wiggle room and would allow exchanges to “easily circumvent the prohibition.”

 

“Without clear rules, there is a real risk that we see the bank deposits that drive local lending and economic growth diverted to these stablecoin offerings,” said Brooke Ybarra, a senior vice president at the American Bankers Association.

 

The provision could be a subject of debate at Thursday’s committee hearing, which is known as a markup because senators from both parties can introduce amendments to the bill. And it will almost certainly face more scrutiny if the bill advances to a vote in the full Senate.

 

“There’s a lot of knowledge and learning and skill that’s gone into this,” said Stephen Gannon, a partner at the law firm Davis Wright Tremaine who has tracked the legislation. “Both sides have a lot to lose by not getting this across the line.”” [1]

 

1. Crypto Industry Is Pushing a Bill to Tilt Regulation in Its Favor. Yaffe-Bellany, David.  New York Times (Online) New York Times Company. May 14, 2026.