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The White House is engaging with stakeholders, Congress has moved forward with a bill, and essential regulators are returning to collaborative press events.
U.S. Congress (Jesse Hamilton/Modified by CoinDesk)
Although the initial phase of crypto policymaking faced challenges this year, it currently appears that U.S. policymakers are advancing on both the legislative and regulatory fronts. The White House is initiating new dialogues regarding stablecoin yield with representatives from the banking and cryptocurrency sectors.
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The narrative
The Senate Agriculture Committee has voted to advance legislation regarding market structure, the White House is actively working on yield issues, and the SEC and CFTC are resuming efforts to initiate crypto rulemaking. What remains uncertain is the speed with which these discussions will result in modifications to the Senate Banking Committee’s version of the market structure bill, or how significantly the various factions differ.
Why it matters
The year is still in its early stages, but lawmakers seem to be achieving progress on market structure legislation. We’ll observe what transpires in February.
Breaking it down
The White House is organizing a meeting with representatives from the crypto and banking sectors to spark a dialogue on stablecoin yield and rewards. Thus far, the participants primarily include members from trade associations and lobbying groups, though a small number of companies are also sending their policy team representatives.
The discussions are expected to revolve around potential compromises regarding the yield issue, which could serve as the foundation for further negotiations as the Senate Banking Committee reconvenes to deliberate on the bill.
Of course, yield rewards represent just one of many unresolved points of contention; there are still matters concerning anti-money laundering and know-your-customer regulations as they relate to decentralized finance (DeFi), whether regulators will need to maintain a quorum of bipartisan commissioners, and if there will be ethics provisions implemented for the president (and other legislators). The members of the Banking Committee have yet to indicate any progress on these topics. A markup hearing appears to be on the horizon in the coming weeks — though the timing remains uncertain.
Another complicating factor is the Federal Reserve. President Donald Trump has expressed his intention to nominate former Fed board member Kevin Warsh as his candidate for chair to succeed current Chair Jerome Powell. The Banking Committee will oversee that confirmation process, which will likely take precedence over crypto legislation when it intensifies.
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The Senate Agriculture Committee, which has been developing its own version of the bill to address commodities regulation, has not made it easier for its Banking counterpart to tackle partisan concerns.
The committee conducted an hour-long hearing on Thursday to consider several proposed amendments to its version of the crypto market structure bill, resulting in the bill advancing along party lines. Democrats initially stated their support for the legislation generally but were advocating for a bipartisan approach.
The hearing, brief as it was, still saw lawmakers reject the proposed amendments, with Committee Chair John Boozman asserting that the Banking Committee holds proper jurisdiction over several of the proposals.
The SEC and CFTC, for their part, are not idly waiting for Congress to act. Paul Atkins and Mike Selig, the respective agency heads, held a joint conference on Thursday (in conjunction with a joint CNBC appearance and a Fox News op-ed). Within their statements about “harmonization” in rulemaking, Selig declared that he was instructing the commodities regulator to commence formal rulemaking on prediction markets and tokenized collateral.
The context for this year continues to be shaped by the impending election. Fairshake, one of the crypto-centric super political action committees (super PACs) supported by crypto firms, announced it has nearly $200 million ready for deployment this year, a figure lawmakers will likely consider as they proceed with legislation. It remains to be seen if this financial backing will outweigh their concerns regarding the bill.
This week
Monday
- The White House is organizing a meeting between representatives from the crypto and banking sectors to discuss stablecoin yield and rewards in the context of crypto market structure legislation.
Wednesday
- 15:00 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
- 15:00 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.
If you have thoughts or questions regarding what I should cover next week or any other feedback you would like to share, feel free to email me at [email protected] or connect with me on Bluesky @nikhileshde.bsky.social.
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See you all next week!
