Senate Ag Committee has released its version of crypto market structure legislation — what happens next

Momentum is building behind efforts to pass cryptocurrency market structure legislation after the Senate Agriculture Committee released bill text that included wins for decentralized finance, though observers say it still lacks the Democratic support needed to become law.

On Thursday, the Senate Agriculture Committee’s Chair John Boozman released the bill text, but said differences remained on “fundamental policy issues.”

“Although it’s unfortunate that we couldn’t reach an agreement, I am grateful for the collaboration that has made this legislation better,” Boozman said Wednesday.

A source familiar with the matter told The Block that there has not been a clear articulation of why Democrats don’t like the bill and said that it seems to be more revolved around political disagreements.

Democrats in the past have taken particular issue with President Donald Trump’s conflicts of interest with his and his family’s crypto ventures, including a DeFi and stablecoin project named World Liberty Financial that lists Trump and his three sons as co-founders. They have also voiced concerns around consumer protections. 

Offices for Democratic Sen. Cory Booker, who has been working on the bill, did not respond to a request for comment. A Senate Agriculture spokesperson declined to comment.

Bipartisan buy-in is essential to pass a crypto market structure bill in the Senate. Sixty votes are required for a bill to pass, requiring unanimous support from Republicans and seven Democrats to be on board. Both the Senate Agriculture Committee and Senate Banking Committee need to hold hearings, called markups, to amend and vote on their versions of a crypto market structure bill. The Senate Agriculture Committee is scheduled to hold its markup next week.

However, progress has stalled in the Senate Banking Committee. Plans to hold a markup fell through last week after Coinbase withdrew its support, citing concerns over the treatment of tokenized equities, DeFi, roles for the Securities and Exchange Commission and Commodity Futures Trading Commission, and a looming issue — how to treat stablecoin rewards.

The prospects of a hearing in the Senate Banking Committee are likely to face a several-week delay, according to reporting from Bloomberg on Wednesday, as that panel redirects efforts toward housing and affordability issues, a recent significant effort for the Trump administration.

‘God bless’ the Senate Ag Committee

The Senate Agriculture Committee has oversight over the CFTC, which is poised to have a broader role in regulating crypto if legislation passes.

The Senate Agriculture Committee is trying to do as much as it can within its remit, said Saga CEO Rebecca Liao in an interview with The Block on Thursday. Liao was also a member of former President Joe Biden’s 2020 presidential campaign. The committee does not have the remit over issues such as stablecoin rewards, Liao added.

“God bless the agriculture committee because they are trying to move this forward despite knowing that they really, in reality, do not have the support that they need in order for this to pass,” Liao said.

Democrats on the Senate Agriculture Committee likely wanted provisions in there to address Trump’s conflicts of interest as well as more consumer protection for DeFi products, Liao said. Those issues will likely be brought up during the committee’s markup next week, she said.

The Senate Agriculture Committee’s momentum on the bill is also pressing up against the midterm election season in a few months, which could change the political calculus. When asked if a crypto bill could be passed into law before those elections in November, Liao said chances were “pretty slim,” citing in part the Trump administration’s pivot to focusing on affordability in housing.

Coinbase Chief Legal Officer Paul Grewal called the Senate Agriculture Committee’s version a “strong foundation.”

“There’s still work to be done,” Grewal said in a post on X. “But there’s a strong foundation here for both Rs and Ds to build on.”

The pros

The bill has support from the White House. Patrick Witt, executive director of the President’s Council of Advisors for Digital Assets, said it was 80% similar to the House’s Clarity Act. 

The House passed the Digital Asset Market Clarity Act over the summer and garnered support from Democrats. It, among other things, requires digital asset firms to provide retail financial disclosures and segregate corporate and customer funds. It also creates a regulatory framework through designating jurisdiction between the SEC and CFTC.

“The newly released Senate Ag market structure bill is a quality bipartisan product that deserves the support of the entire committee at Tuesday’s markup,” Witt said Thursday in a post on X.

And some pointed to key software developer language in the Senate Agriculture Committee’s bill text.

“These provisions protect noncustodial software developers and infrastructure providers from improper regulatory treatment under the CEA,” the DeFi Education Fund said in a post on X on Wednesday. “We look forward to continued constructive conversations.”

Blockchain Association CEO Summer Mersinger said legislation needs to have lawmakers on both sides of the aisle working on it. 

“Any lasting and effective market structure legislation must reflect bipartisan engagement and collaboration on both sides of the aisle,” Mersinger said in a statement.

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