Crypto oversight split heads to Senate panel vote
Senate Banking Committee poised to take critical vote toward crypto legislation that would establish an outline of federal regulations for digital asset firms as well as split market oversight between the SEC and the CFTC.
The vote represents only the beginning, though, because the bill has already weathered several months of disagreement among the interests of banks, crypto businesses, Republicans, Democrats, and lobbyists.
It nearly passed in early January. That attempt was ultimately foiled by disagreements from the financial institutions and crypto businesses over the proposed language.
Now, the committee is taking a second crack at passing the bill. In comments to Fox Business last week, Senator Tim Scott, who heads the committee, said he wanted “13 of 13 Republicans on board.” That means all 13 Republican members.
Lawmakers try to settle the stablecoin rewards fight as banks warn about deposits
Banks dislike the proposed text since it does not completely address the issue of the potential resemblance between interest and rewards in the context of stablecoins. The matter of concern is that the provision allows stablecoins to provide incentives to their holders, which might cause funds to leave traditional banking deposits and move to crypto products.
The definition of a stablecoin is an asset with stable value, pegged to the U.S. dollar, for example. In the sphere of cryptocurrencies, rewards were used for retaining the audience within tokens. This is why the wording became crucial.
The suggested amendment was brought forth by Thom Tillis, a senator from North Carolina, and Angela Alsobrooks, a Maryland state delegate. According to their proposal, crypto companies may offer their clients specific rewards without copying the yield offered by banks.
The new addition also enabled Coinbase Global Inc. (COIN) and other cryptocurrency companies to support the bill. Banks have stated that it is still not enough. Large-bank and small-lender organizations stated that the language “fails” to protect bank deposits.
Thom addressed this banking objection through X. Thom pointed out that banks can oppose this language, but “we respectfully agree to disagree.”
Democrats remain an obstacle to the passage of the bill. Some want stricter anti-money laundering regulations. Other Democrats want stricter language to stop elected officials from earning money off digital asset projects. Senators and lobbyists think that changes can be made to the bill after the committee vote, but before any action takes place in the full Senate. This opportunity is quickly running out.
The House passed its own version of the Clarity Act back in July. The Senate must pass the bill before the end of 2026 in order for it to go to President Donald Trump. In the full Senate, it will need seven Democrat senators in addition to the Republican majority.
Trump family crypto links give Democrats a bigger political target
Trump had openly chased industry support and called himself a “crypto president.” His family’s business ties to digital assets are now feeding one of the bill’s hardest political fights.
The main case is World Liberty Financial, a token project tied to the Trump and Witkoff families, along with other partners. Zach Witkoff serves as chief executive. Trump and Steve Witkoff, who is Trump’s special envoy to the Middle East, were listed as co-founder emeritus on the project’s website before that page was removed.
Investors put more than $550 million into World Liberty across two fundraising rounds. After those rounds ended, the project sold another 5.9 billion tokens to accredited private investors. Those deals were worth hundreds of millions of dollars, and much of the money went to entities linked to the founders.
The White House says Trump does not run the family’s crypto businesses and has handed control to relatives and business partners. Anna Kelly said, “President Trump’s assets are in a trust managed by his children. There are no conflicts of interest.”
Early buyers of Trump’s coin were allowed to sell 20% of their holdings last year. Some bought tokens for as little as 5 cents. The rest remains locked. World Liberty did not give those investors a clear unlock schedule before they bought in.
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