Crypto legislation is stuck — but Trump may not need it
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There was a closed-door meeting Wednesday between the pro-crypto members of the Senate Democratic caucus and an array of leaders from the digital asset world, discussing legislation around how to structure law for the crypto market.
The big picture: Congress is making it difficult for President Trump to achieve the big legislative win he promised the crypto industry — but his administration could still deliver without passing laws.
The latest: The meeting Wednesday with Democrats got heated, largely over a leaked market structure proposal from earlier in October, a source familiar tells Axios and other outlets.
- Punchbowl News had reported on the proposal from Democrats to Republicans. Crypto In America published it in full.
- The proposal reaches deep into decentralized finance, and the industry reacted with enormous hostility to what Democrats were looking to do. Democrats, meanwhile, reportedly fumed at executives for hurting their negotiating position.
- Crypto executives also met privately with GOP leaders Wednesday.
State of play: The clock is ticking on market structure.
- Congress has a lot on its agenda as it is, and now it's going to come out of a government shutdown with a backlog.
- There are now two significant pieces of crypto market structure legislation out there. There's Clarity, which passed the House with a lot of Democratic support, and the Responsible Financial Innovation Act, which is draft Senate legislation.
Yes, but: While legislation stalls, crypto policy is moving along. The SEC and the CFTC are steaming ahead to write rules around the issuance and trading of digital assets.
- The two agencies also say that the turf war between them is over, and an alum of the Crypto Task Force is favored to take over the CFTC.
Reality check: By early next year, the commission could have comment periods open on a draft of new rules under current law.
- Rushing at full tilt, it's not impossible to imagine those rules fully promulgated by the summer of 2026.
- In theory, by the year's end, there could be fully regulated crypto exchanges operating in the U.S. and new tokens hitting the market under some sort official pathway.
- In the background, the Genius Act regulating payment stablecoins will go into effect by then too.
What we're watching: All of that would give the crypto industry two years of regulated operation heading into the next presidential election.
- That means that the next Democratic nominee will be in the position of dealing with an industry that's more reality than vision.
Between the lines: Before the Biden admin, the industry primarily wanted better regulation. Now it's pushing for legislation.
The bottom line: In the end, legislation might be a nice-to-have, but not a need-to-have.
