Senate Heads Into Pivotal Week for Crypto Legislation
After many delays, Senators are finally set to take the first step toward passing a market structure bill
Welcome to the Monday edition of the Crypto In America newsletter!
What you’ll read: A breakdown of what to expect from this pivotal week for crypto on Capitol Hill, Fed Chair Jerome Powell hit with a criminal investigation, and what to watch this week.
Well, it’s finally here. The Senate Banking Committee — and perhaps its Agriculture Committee counterpart — heads into a markup week for what’s shaping up to be one of the most consequential pieces of legislation in recent financial history.
The committee’s highly anticipated January 15 event has felt like a moving target since August, when the original plan was to hold it by the end of September. Industry infighting, partisan squabbles over key details, and efforts by legacy banking and securities interests to extract their pounds of flesh repeatedly pushed back the timeline.
Then on Friday, Banking Committee leadership issued an official notice that it would be “marking up” — i.e., holding a session to vote on and consider amendments to — the latest version of the bipartisan text produced over the past few weeks of Senate negotiations, beginning at 10 a.m. Thursday.
The notice also revealed that the Digital Asset Market Clarity Act (H.R. 3633), the House’s market structure bill that passed the lower chamber in July, will serve as the vehicle for the new text. In other words, the Clarity Act name stays, but the text of the final bill will be the Senate’s product.
So where does the bill stand as we kick off the week?
The text set for a Banking Committee vote on Thursday has been undergoing final edits and is expected to be sent to senators Monday or Tuesday for amendments, according to sources familiar with the process.
The three big things everyone will be watching when the bill text drops:
1. What, if any, ethics rules will apply to public officials dabbling in crypto, including the President.
2. Who wins the great stablecoin yield debate — crypto or the banks — or whether a compromise emerges.
3. Where Democrats and Republicans land on decentralized finance, especially around securities trading and illicit finance.
DeFi Education Fund Executive Director Amanda Tuminelli, who attended closed-door meetings with crypto and securities industries leaders on the Hill last week, will be watching the latter like a hawk.
“Banks and trade associations like SIFMA speak loudly, even though this is a digital assets bill,” she said. “Their main concern is regulatory arbitrage — particularly when it comes to decentralized exchanges trading tokenized securities.”
Tuminelli will also be watching closely for the inclusion of provisions around self-custody, protections for software developers, and the Blockchain Regulatory Certainty Act (BRCA), which enshrines both. She called their inclusion in the new text non-negotiable.
Another DeFi policy wonk, ConsenSys General Counsel Bill Hughes, struck perhaps the most optimistic tone heading into the week.
Dueling markups still on the cards?
Thursday may yet bring dueling markups, with the Senate Agriculture Committee still scheduled to mark up its portion of the text at the same time as the Senate Banking Committee.
Reporting from Politico last week suggested that lingering issues threatening the markup’s bipartisan nature could prompt the committee to punt the markup to a later date. Negotiations between the offices of Chairman John Boozman (R-AR) and Sen. Cory Booker (D-NJ) are said to have continued over the weekend and could determine the markup’s fate.
Either way, Thursday promises to be a busy and high-stakes day for crypto on Capitol Hill.
Powell Under Fire Again as DOJ Opens Probe
The Department of Justice (DOJ) has opened a criminal investigation into Federal Reserve Board Chair Jay Powell over his June testimony to Congress regarding the Fed’s $2.5 billion renovation of its D.C. headquarters.
The investigation, stemming from Powell’s alleged false statements during Senate Banking Committee testimony about the Fed’s headquarters refurbishment, comes as President Trump prepares to announce his pick to replace Powell, whose term as Fed Chair expires in May.
Some, including Powell himself, see it as a political shot across the bow, coming after the president spent months criticizing Powell for what he deemed a lack of timely interest rate cuts. In a video statement, Powell said the investigation stemmed from his ongoing disagreements with the administration over interest rates.
“The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President,” he said.
Trump told NBC News in an interview on Sunday that he had no knowledge of the investigation.
“I don’t know anything about it, but he’s certainly not very good at the Fed, and he’s not very good at building buildings,” he said.
National Economic Council Director Kevin Hassett and Fed Governor Christopher Waller are among the candidates favored to replace Powell.
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👀 What To Watch This Week
Tuesday
8:30 am: The Bureau of Labor Statistics releases a key measure of inflation with the Consumer Price Index.
10:00 am: The House Financial Services Subcommittee on Digital Assets hosts a hearing on fintech innovations and regulations.
1:00 pm: Hedera (HBAR) upgrades its mainnet.
2:00 pm: The House Ways and Means Committee holds a trade subcommittee hearing on American innovation and tech leadership.
Wednesday
8:30 am: The Commerce Department releases delayed retail sales figures for November.
8:30 am: The BLS releases delayed Producer Price Index for November, another important inflation measure.
2:00 pm: The Fed releases its Beige Book, offering a real-time snapshot of the U.S. economy.
Thursday
10:00 am: The Senate Banking Committee holds a markup of the Digital Asset Market Clarity Act, H.R. 3633. The Senate Agriculture Committee may hold its own markup at the same time.
3:00 pm: Jamie Dimon speaks at the U.S. Chamber of Commerce on the State of American Business.
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