Election-Year Politics Threaten Bipartisan Crypto Legislation Push
Senate Banking Chair Tim Scott is under increasing pressure to pass a landmark crypto market structure bill before a March deadline amid election-year gridlock and partisan tensions. The proposed legislation aims to establish a comprehensive regulatory framework for digital assets and assign federal oversight across the crypto sector. However, its passage depends on achieving GOP–Democrat consensus on key issues, including ethics concerns surrounding crypto ventures linked to the Trump family.
The crypto industry has invested over $140 million into the Fairshake super PAC to influence the outcome. Major banks have launched the American Growth Alliance to advocate for crypto-advancing positions, notably pushing for restrictions on yield programs involving stablecoins. Stand With Crypto, an industry group, plans to score lawmakers based on their votes related to market-structure legislation, warning that failure to pass the bill could jeopardize years of industry development.
Tim Scott has stated that progress is steady and bipartisan, with the goal of building a durable framework that protects investors while keeping the U.S. at the forefront of financial innovation. Democrats emphasize substance over politics, with Senator Ruben Gallego cautioning that failure to act could drive crypto activity overseas or into illicit markets.
In the House, the Digital Asset Market Clarity Act was passed with CFTC oversight. The Senate is currently crafting its own framework but uses different terminology, such as "ancillary assets," resulting in negotiation friction. Some GOP members, including Senator John Kennedy, have described the delayed markup as inevitable but praised Scott for maintaining productive negotiations.
Meanwhile, the American Federation of Teachers has expressed concern that the bill could threaten public-sector pensions by enabling tokenization of stock and bypassing securities oversight.
