“We hope our Republican colleagues will agree to a bipartisan authorship process, as is the norm for legislation of this scale,” stated the Democrats. This appeal highlights the shared interest in expediting the legislative process while ensuring meaningful collaboration.

Democrats Advocate for Bipartisan Authorship

The statement was backed by prominent Democrats involved in crypto policy, including Kirsten Gillibrand (D-NY), Cory Booker (D-NJ), and Mark Warner (D-VA). This follows their introduction of a seven-pillar framework aimed at regulating U.S. crypto markets, laying the groundwork for bipartisan discussions as Republicans refine the Clarity Act.

Senate Democrats are seeking an active role in drafting the legislation, preferring to co-author rather than merely provide feedback on a GOP-led bill. Politico reports suggest Democrats also desire closer collaboration with the Senate Agriculture Committee, which oversees the Commodity Futures Trading Commission (CFTC).

Current State of Crypto Market Structure Bill

Senate Banking Republicans have expressed a willingness to receive Democratic input on the bill until October 20, though they have not finalized the schedule. The Republican draft suggests forming a joint committee between the SEC and CFTC to recommend “regulatory harmonization.” Historically, these agencies have adopted different stances on digital assets.

The Democrats’ framework proposes granting the CFTC authority over spot markets for non-security tokens while creating criteria for the SEC to regulate tokens as securities. This approach aims to refine the regulatory landscape for digital assets significantly.

Further, Senate Democrats propose prohibiting elected officials and their families from engaging in crypto projects while in office, addressing concerns of potential conflicts of interest. They also advocate for increased funding for regulatory bodies, indirectly addressing former President Donald Trump’s crypto-related financial gains during his tenure.

As crypto market structure continues to evolve, the call for a bipartisan authorship approach underscores the importance of unity in crafting legislation that balances innovation with consumer protection.

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Maxine Waters, the ranking member of the House Financial Services Committee, along with the ranking member of the digital assets subcommittee, Stephen Lynch, stated that they would spearhead the Democratic opposition against the Republicans’ attempts to pass what they term as “hazardous” legislation. Earlier this month, Republican leaders declared their intention to consider bills pertaining to payment stablecoins, the structure of the crypto market, and central bank digital currencies (CBDCs) starting Monday.

“Republicans are rapidly advancing a perilous package of crypto legislation through Congress,” Waters contended. She further criticized the bills for their lack of crucial consumer protections and national security measures, and for potentially implicating Congress in “Trump’s unprecedented crypto scam.”

Given the slim majority held by the Republicans in the House, it is uncertain whether they will garner enough support to pass all three crypto bills given the opposition led by Democrats like Waters and Lynch. The GENIUS Act, a bill aimed at regulating stablecoins, managed to pass in the Senate despite initial opposition from several Democrats. However, legislative debate often encompasses discussions about US President Donald Trump’s crypto ventures.

Lynch expressed concern over his Republican colleagues’ keenness to favor the crypto industry while seemingly disregarding the potential vulnerabilities and opportunities for abuse within the crypto sphere.

Reportedly, Trump added approximately $620 million to his personal portfolio within months due to his investments in the crypto industry, including his family-backed business, World Liberty Financial. This crypto company has also been scrutinized for issuing its own stablecoin, USD1, as lawmakers in Congress, potentially influenced by Trump, contemplate legislation to regulate the asset.

Republicans in the House plan to consider the Anti-CBDC Surveillance State Act and the CLARITY Act, in addition to the GENIUS Act. The former aims to prevent the development of a US government-issued digital dollar, while the latter seeks to establish a digital asset market structure.

On Friday, White House crypto advisor Bo Hines announced on X that he expects the GENIUS Act to pass without any amendments or provisions, thereby fast-tracking the bill to the president’s desk. However, efforts to pass a crypto market structure bill seem to be shifting to the Senate.

Tim Scott, Chair of the Senate Banking Committee, Hines, and Wyoming Senator Cynthia Lummis announced in June that the Senate would aim to draft, introduce, and pass a bill by September 30, preceding the House’s announcement of its “crypto week” plans for the CLARITY Act.

“This will be the best version of a market structure bill that has been debated in the House since 2023,” commented House Financial Services Committee Chair French Hill during the recent release of the Thinking Crypto podcast. “We’ll vote on it in the House. It will then proceed to the Senate where we’re looking forward to inputs from Senator Scott, Senator Lummis, Senator Gillibrand, Senator Hagerty, and others about market structure.”

A market structure bill would likely define the roles that major US financial regulators, particularly the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), would play in overseeing digital assets. The proposed bill in the House suggests assigning more authority to the CFTC for the registration and regulation of digital assets.

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