Senate Banking Committee Advances Crypto Regulation Bill
WASHINGTON — The Senate Banking Committee, controlled by Republicans, approved a long-awaited bill on Thursday aimed at regulating virtual currencies. This marks a significant milestone for the legislation, which faced delays due to disagreements between crypto firms and banking interests.
With support from two Democratic senators, the bill is now set to be presented to the full Senate, which is likely to see vigorous lobbying efforts.
The Transparency Act aims to clarify which regulators have jurisdiction over cryptocurrencies. All Republicans on the committee voted in favor, alongside Democrats such as Sen. Ruben Gallego from Arizona and Sen. Angela Alsobrooks of Maryland. This support is viewed as a significant win for the crypto industry and could improve the bill’s prospects for passage this year.
However, Gallego and Alsobrooks indicated they might not support the bill on the Senate floor due to ongoing negotiations among legislators.
Some Democrats voiced concerns regarding the bill, suggesting that its anti-money laundering provisions are insufficient and that it should prevent political figures from benefiting financially from crypto activities.
During Thursday’s hearing, a bipartisan group of senators managed to reach a tentative agreement, but tensions arose as the deal came after the deadline for amending the bill, sparking discussions about whether any compromise could still be viable.
Sen. Tim Scott, the committee chair, allowed the compromise to be discussed but declined other proposed amendments from Democrats, such as one concerning stablecoin yields.
“It took years.”
The crypto industry has been advocating for this legislation, arguing that it’s crucial for the future of digital assets and for resolving fundamental issues faced by crypto businesses. The bill would provide definitions of when a crypto token is classified as a security or commodity, offering the industry important legal clarity that could boost the acceptance of digital currencies.
“This bill isn’t about taking sides between traditional finance and new technology, or between Republicans and Democrats,” Scott remarked at the start of the hearing.
The industry invested over $119 million backing pro-crypto candidates in 2024 to promote the Clarity Act and to support another bill that passed last year, which facilitated the growth of dollar-backed tokens called stablecoins.
“It’s taken years of effort to reach this stage,” noted Miller Whitehouse Levine, CEO of the Solana Policy Institute, which lobbies for policies that support digital asset innovation.
Banks have opposed key elements of the bill, contending that it might grant crypto firms excessive freedom and incite competition for deposits through stablecoins. Banking groups are trying to push back against the committee’s Republicans, with the American Bankers Association urging its member CEOs to lobby senators for stricter language on stablecoins.
While Trump engaged with the crypto sector during his campaign—where his family benefited from tokens—he has made crypto reform a priority for his potential second term, with reports suggesting that the White House is keen on advancing this legislation.
The House approved its version of the Clarity Act last year. Analysts warn that if the Senate doesn’t pass the bill this year, especially with the upcoming midterm elections that could shift control of the House to Democrats, its chances of becoming law in the near future dim considerably.
Sen. Elizabeth Warren, the leading Democrat on the Banking Committee, expressed worries that the bill may be overly favorable to crypto companies.
“Our job is to serve the American people, not to push for pro-industry crypto legislation that jeopardizes American consumers, investors, national security, and the broader financial system,” she stated.
