Senate Banking Committee Nears Vote on Landmark Crypto Bill as Ethics Debate Takes Separate Path
Jurisdictional Constraints Push Trump-Focused Ethics Provisions Out of Market Structure Bill
In an exclusive interview with CoinDesk on the eve of a crucial committee vote, Senate Banking Committee Chairman Tim Scott (R-S.C.) revealed that Democratic proposals to restrict former President Donald Trump’s involvement in cryptocurrency will not be included in the current market structure legislation. The committee is set to vote Thursday on the long-anticipated Digital Asset Market Clarity Act, a watershed moment for cryptocurrency regulation in the United States.
“The ethics language has got to go through the jurisdictional areas in our body, and that would be the ethics committee,” Scott explained, clarifying why provisions targeting Trump’s cryptocurrency activities couldn’t be incorporated into the current bill. “We can talk about it; we can even work on language, but dropping it into the bill is far more difficult than we had anticipated.” This jurisdictional hurdle has redirected the ethics debate to a standalone legislative effort likely to be handled by the Senate Ethics Committee, which operates under different leadership and membership than the Banking Committee.
The chairman’s comments come after months of intensive bipartisan negotiations on legislation that represents the cryptocurrency industry’s most critical policy objective. Democratic lawmakers had been pushing for provisions that would prevent senior government officials from profiting from cryptocurrency businesses – measures widely understood to target former President Trump, who has recently embraced digital assets. According to Scott, these ethics considerations will now be addressed “as part of the broader package at a later date,” with Senators Cynthia Lummis (R-Wyo.) and Ruben Gallego (D-Ariz.) leading a separate legislative initiative. Gallego had previously described the ethics provision as a “red line” in negotiations.
Stablecoin Rewards Remain Contentious as Last-Minute Negotiations Continue
While the ethics provisions have found a new legislative path, Scott acknowledged that disagreements over stablecoin rewards remain unresolved heading into Thursday’s markup session. “We’re hopeful that they will all say yes to the language that we’ve given them,” the chairman said, noting that revised text is circulating among committee members who are “checking with their stakeholders back at home.”
The draft bill released earlier this week had already modified provisions from last year’s GENIUS Act regarding stablecoin rewards. In response to critics concerned that stablecoins could threaten traditional bank deposits, the revised language restricted stablecoin rewards that resembled savings accounts while maintaining rewards for active use and transactions. Despite these adjustments, sources familiar with the negotiations indicate several committee members remain uncomfortable with the section.
These eleventh-hour negotiations underscore the complexity and importance of the legislation. “This has been all-hands-on-deck,” Scott remarked, adding that “colorful language and strong opinions have been part of the process” due to the passionate views on cryptocurrency regulation. The stablecoin provisions represent a critical balancing act between fostering innovation in the digital asset space and addressing legitimate concerns about financial stability and consumer protection.
Industry Stakes High as Landmark Legislation Approaches First Major Senate Vote
Thursday’s committee vote represents a pivotal moment for the cryptocurrency industry, which has invested years of advocacy and hundreds of millions of dollars in political spending and lobbying to reach this point. The Digital Asset Market Clarity Act stands as the single most important policy objective for the sector, with industry stakeholders viewing regulatory clarity as essential for mainstream adoption and institutional investment.
A favorable outcome in the Banking Committee, particularly with bipartisan support, could create momentum for full Senate approval and ultimately enactment into law. Scott expressed optimism about the bill’s prospects, stating he would like to see it become law “before the end of the year.” For the cryptocurrency ecosystem, the establishment of a comprehensive regulatory framework would provide the legal certainty many institutional investors and businesses have been awaiting before fully engaging with digital assets.
The markup process will see committee members considering approximately 75 amendments submitted by legislators from both parties. Following Banking Committee consideration, the legislation will require approval from the Senate Agriculture Committee, which has scheduled its own markup later this month. If both committees advance their respective bills, the two versions will be combined into a single piece of legislation for consideration by the full Senate.
Chairman Scott Defends Decision to Proceed with Vote Despite Unresolved Issues
When questioned about his determination to move forward with Thursday’s markup despite ongoing disagreements, Scott defended the timing by emphasizing the extensive duration of the negotiation process. “Truth of the matter is, at some point you got to vote,” he stated firmly. “I think some people are afraid of the consequences of voting no, and they’ve been trying to hold it up so they wouldn’t have to face those consequences.”
This assertion suggests that political calculations may be influencing the positions of some lawmakers, particularly as the cryptocurrency industry grows increasingly influential in campaign finance and public discourse. The chairman’s comments reflect the growing impatience among cryptocurrency advocates who have long sought regulatory clarity in a sector that has operated in legal uncertainty for years.
The upcoming vote represents more than a procedural milestone; it signals a potential inflection point in America’s approach to digital asset regulation. After years of fragmented oversight and enforcement actions, the Digital Asset Market Clarity Act offers a comprehensive framework that could position the United States to compete globally in blockchain innovation while providing necessary consumer protections and market stability.
As Thursday’s markup approaches, stakeholders across the political spectrum and throughout the financial ecosystem will be watching closely. The outcome could determine whether the United States embraces digital asset innovation with clear rules of the road or continues with the regulatory ambiguity that has characterized the sector’s development to date. Whatever the result, Scott’s committee vote marks an historic moment in the evolution of financial regulation in the digital age.
