With Donald Trump's accession to office, legal regulations concerning cryptocurrencies have started to take shape. Last year, the GENIUS proposal was approved, yet further advancements have stalled. Trump is eager to bring legal clarity to cryptocurrency markets swiftly, but his push for the legislation’s completion encounters various hurdles in the Senate.
Concerns Surrounding the Cryptocurrency Bill
Concerns are primarily bifurcated. The first group comprises players within the cryptocurrency markets, mainly US-based crypto companies. The second group involves particularly Democrats who worry about expanded regulatory boundaries. Neither Democrats nor Republicans desire legislation wholly in favor of cryptocurrency.
This week, the comprehensive cryptocurrency market structure bill received warnings from two members of the Senate Judiciary Committee. On Wednesday, Republican Senator Chuck Grassley and Democrat Dick Durbin criticized the inclusion of the Blockchain Regulatory Certainty Act (BRCA) in a letter addressed to Senate Banking Committee Chairman Tim Scott and top Democrat Elizabeth Warren.
Why is there discontent? BRCA specifically involves the DeFi sector, where developers who do not control user funds or provide custodial services receive some exemptions from money transfer laws. The two Senators opposing this clause complain about not being consulted on such critical matters. The Senate Judiciary Committee oversees the Department of Justice, FBI, and Homeland Security.
The Senate Judiciary Committee, having jurisdiction over Title 18, was neither consulted nor given a meaningful opportunity to review the proposed changes in advance.
This provision would create a blind spot for state and local law enforcement and state district attorneys who rely on FinCEN’s records information for tracing money flow in cases of routine money laundering, terrorism, drug, and human trafficking.
Current Status of the Cryptocurrency Clarity Act
This week saw the release of a 270-page updated draft. Over 70 amendment proposals were submitted by Thursday, turning the draft into a vast, objection-filled document. Even key crypto figures have raised concerns, pointing to issues such as DeFi-related problems, the abolishment of stablecoin rewards, and worries concerning the SEC’s role.
Bipartisan support is essential for the bill to pass in the Senate. This is precisely why the support of Senators Grassley and Durbin, mentioned earlier, is critical. The legislation, once passed through the Senate Banking and Agriculture Committees, will need more than a simple majority to clear the general assembly – the endorsement of 60, i.e., both parties, is crucial.