Crypto Rules Hit a Snag: What's Next?
The U.S. Senate's plan to create clear rules for cryptocurrency has hit a significant roadblock. The delay is not just about timing but also about disagreements and shifting priorities within the Senate.
Senate Banking Committee Pauses Crypto Bill
The Senate Banking Committee has put the brakes on its major crypto bill, which was supposed to be a significant step in regulating cryptocurrency. The bill is now on hold, and the focus has shifted to housing issues.
The delay began when Coinbase, a major crypto exchange, withdrew its support for the bill. This happened just before a key meeting where lawmakers were going to discuss and possibly vote on the bill. Without Coinbase's backing, the committee decided to focus on other priorities.
Industry Experts Predict Delays Until March
Industry experts say the delay could last until late February or March. Lawmakers are trying to find common ground, but it's challenging in a divided Senate.
Reasons for the Slowdown
- Coinbase's Withdrawal:
- Coinbase's decision to pull support showed significant disagreements between crypto companies and the bill's authors.
- A major point of contention is stablecoin rewards, which some see as crucial for crypto innovation.
Traditional Banks Push for Stricter Rules:
- Traditional banks are lobbying for stricter regulations on crypto products.
- They argue that these products could divert deposits from banks and disrupt the lending market.
- This lobbying has made the bill's language stricter and increased opposition from the crypto industry.
Political Priorities:
- With midterm elections approaching, senators are focusing on issues that matter to voters, such as housing affordability.
- This shift in focus has slowed down the progress of the crypto bill.
Will the Bill Move Forward?
Some lawmakers believe the delay is temporary and that strong crypto rules are still possible. However, the interruption highlights how fragile the consensus on digital assets is.
Senate Agriculture Committee Releases Own Draft
Meanwhile, the Senate Agriculture Committee has released its own draft of a market structure bill. However, industry observers say it might lack the bipartisan support needed to pass.
