Republicans and Democrats remain divided on crypto market structure bill despite new draft

Senator John Boozman, a Republican US senator from Arkansas, disclosed that Democrats and Republicans have not yet reached an agreement on several crucial policy challenges related to legislation on crypto market structure. 

Boozman made these remarks just after the Republicans made a big move on Wednesday, January 21, with the release of a draft of the bill. This draft is scheduled for review during a markup on Tuesday, January 27. 

“Even though we still disagree on some core policy points, this bill expands on our bipartisan draft and includes feedback from stakeholders, reflecting months of effort,” Boozman said, adding that, “It’s unfortunate that we couldn’t come to a consensus, but I appreciate the teamwork that improved this legislation. It’s time to advance this bill, and I’m eager for the markup next week.” 

Crypto bill sparks debates among individuals in the industry 

Regarding legislation on crypto market structure, sources close to the situation, who wished to remain anonymous, as the talks were private, unveiled that the core objective of the bill is to formulate comprehensive oversight guidelines for cryptocurrency markets under the guidance of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

Nonetheless, James Murphy, popularly known as MetaLawMan, a prominent crypto lawyer and former securities litigator who pivoted his practice to focus on digital assets, claimed that the bill establishes a framework that exempts the decentralized finance (DeFi) sector from CFTC oversight.

To clarify this point, the crypto lawyer noted that the bill safeguards DeFi software developers and certain service providers from liability under the CFTC’s regulations. Moreover, he argued that stablecoin yields are not regulated under this crypto bill because they are subject to oversight by the Banking Committee.

On the other hand, Bill Hughes, a lawyer at Consensys, which provides Ethereum software solutions, weighed in on the matter as debates continued to heat up.

Hughes mentioned that, “In summary, the Digital Commodity Intermediaries Act: Does not regulate self-custody wallets; Does not regulate non-custodial DeFi interfaces; Regulates any platform that takes custody or controls execution; and Focuses specifically on intermediaries rather than protocols or users.” 

It is worth noting that the Republicans decided to release a draft of the crypto bill after news that a potential delay in moving the Senate Banking Committee’s revised crypto market structure bill to the next stage hit headlines, suggesting the delay will end in late February or March. 

Crypto bill faces delays amid Senate Banking Committee’s shift in focus 

Regarding the delay in the crypto bill, reports noted that the Senate Banking Committee contributed to it after shifting its focus from the bill to US President Donald Trump’s affordability agenda. 

Concerning this agenda, sources mentioned that the President issued an executive order on Tuesday, January 20, restricting Wall Street investors from buying single-family homes. According to Trump, this move is part of his administration’s long-standing goal of lowering costs ahead of the November US midterm elections.

On Wednesday, January 21, a reliable source indicated that the Banking Committee would make the President’s executive order its main focus, thereby delaying the bill’s progress until February or March. 

This situation could signal another delay for the Senate on this bill, after it faced delays from both the Banking and Agriculture Committees, which are seeking bipartisan backing.

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