Sweeping crypto bill heads for Senate Banking Committee hearing amid murky path forward

A sweeping bill to regulate the cryptocurrency industry in the Senate Banking Committee is moving forward in the new year, one way or another, with a forecast of murkiness and a dash of optimism.

Both Democrats and Republicans met on Tuesday to discuss the bill as Senate Banking Committee Chair Tim Scott, R-S.C., is moving “full steam ahead towards” holding a hearing to amend and vote on legislation this month, a source familiar with the matter told The Block. Punchbowl News reported on Tuesday that Scott told lawmakers and staff that he would hold “a markup of crypto market structure no later than Jan. 15 — whether or not the bill has bipartisan support.”

Still, as of Tuesday, a bill may not have enough votes, on either side of the aisle, the person familiar said.

Lawmakers in the Senate are tackling an all-encompassing bill that seeks to regulate the crypto industry at large. The Senate Banking Committee has a draft that looks to allocate jurisdiction between two main federal agencies — the Securities and Exchange Commission and the Commodity Futures Trading Commission — as well as create a new term for “ancillary assets” to clarify which cryptocurrencies are not securities. There had been hopes that a markup hearing would have been held before the end of 2025, but that didn’t come to fruition.

As of Tuesday, progress is being made, but it’s not clear as to how much, the source familiar said.

Over the past year, lawmakers have discussed key sticking points with the bill, including how to regulate decentralized finance and address President Donald Trump’s conflicts of interest in crypto.

Bloomberg estimated in July that the sitting president has earned roughly $620 million from his family’s cryptocurrency ventures. These include World Liberty Financial, a DeFi and stablecoin project that lists Trump and his three sons as co-founders. The family also holds a 20% stake in the mining firm American Bitcoin. Democrats have repeatedly expressed concerns about Trump’s crypto ventures, including memecoins tied to the president and First Lady.

Meanwhile, on the Republican side, Sen. John Kennedy “is a major question mark,” the source said. Kennedy’s office did not respond to a request for comment.

Kennedy spoke to Punchbowl News on Tuesday.

“My understanding is that the chairman is gonna have a vote, come hell or high water, on Thursday for the next week,” Kennedy said.

There is a bipartisan version floating around, the source familiar said on Tuesday.

The path forward

“There are still points of, I wouldn’t say disagreement, of points that need to find compromise,” said Cody Carbone, CEO of crypto advocacy group The Digital Chamber, including DeFi, conflicts of interest, and trying to include a provision that the Senate will confirm CFTC commissioners. There is currently just one commissioner, of the maximum five, at the CFTC — CFTC Chairman Michael Selig.

At the end of the day, both Democrats and Republicans want to get a bill done, Carbone told The Block.

“They agree on a majority of the substance,” he said. “Now there are some pieces that they still need to find that last bit of compromise, and that’s the perfect place for a markup. Do it in an open venue.”

There also could be a Senate Agriculture Committee markup as well next week, since there is consensus to do both markups at the same time, Carbone said. The Senate Agriculture Committee, which oversees the CFTC, has drafted legislation it released last month that would give new authority to that agency. Both committee versions of the bill would need to be reconciled.

A spokesperson for that committee did not immediately respond to a request for comment.

Market structure legislation faces a government shutdown problem. Congress temporarily funded the government following a 43-day shutdown that ended in November. That funding extends through Jan. 30, 2026, but if funding isn’t agreed to again, the government will shut down again, potentially putting a pause on work on a crypto market structure bill.

It is “critical” to get markups done before a potential government shutdown so progress doesn’t slow, Carbone said. Lawmakers can work on sewing together both the bills from the Senate Agriculture Committee and the Senate Banking Committee during a shutdown, Carbone said.

“You can do a lot of work even during a shutdown in trying to put the bills together,” he said.