The much-anticipated crypto market structure bill, intended to establish a clearer regulatory framework for digital assets in the United States, appears to be facing significant delays.
Recent discussions among a bipartisan group of pro-crypto senators suggest that a markup, initially expected before Christmas, may be postponed until after the holiday season.
Negotiations Stalled For Crypto Bill
According to a report by Eleanor Terret from Crypto In America, a closed-door meeting on Tuesday revealed that advancing the bill before Christmas is becoming increasingly unlikely.
The significant hurdle lies in the ongoing negotiations between Republican and Democratic lawmakers, who remain divided on several critical issues.
A leaked three-page compromise proposal from Senate Banking Republicans to their Democratic counterparts, reported by Politico, offered some insights into the negotiation process.
Among the provisions highlighted in the proposal was an assurance to Democrats that front-end sanctions compliance for certain decentralized finance (DeFi) platforms would be integrated into the bill. In exchange, the proposal sought to preserve protections for software developers and self-custody.
Two major points for Democrats were included in this offer: a requirement for Democratic commissioners to be involved in agencies overseeing crypto and ethics language aimed at preventing high-ranking government officials from profiting from digital assets.
Bipartisan Support Remains Elusive
As lawmakers continue to grapple with the complexities of the negotiations, there is a sense of fatigue among those involved. At this week’s BA Policy Summit, Senator Bernie Moreno described the bargaining process as “decently frustrating.”
Senator Cynthia Lummis, one of the top supporters of the industry and the passage of the market structure bill, and chair of the Senate Banking’s Subcommittee on Digital Assets, noted that the staff members working on the bill are feeling “exhausted.”
With only seven working days remaining before members depart for the Christmas break, negotiations are expected to persist. Senator Lummis has indicated her desire to release a draft of the bill by the end of this week, allowing the industry a chance to review it ahead of a potential markup next week.
According to Terret, Senate Banking Chair Tim Scott could still convene a markup next week and likely push the bill through along party lines. However, securing bipartisan support would greatly enhance the final bill’s chances of passing in the full Senate next year, potentially explaining a decision to delay the markup until January.
Meanwhile, the Senate Agriculture Committee, which previously released an incomplete draft of its own market structure bill last month, may also hold its markup next week.
However, committee Chairman John Boozman suggested to Bloomberg Tax that he would likely postpone such a decision until next year, citing several “difficult issues” that need resolution.
A spokeswoman for the committee later confirmed to Crypto In America that a markup would be scheduled “soon,” indicating that discussions are still ongoing.
Featured image from DALL-E, chart from TradingView.com
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