Crypto policy talks get dropped: Democrats reschedule talks with industry

The dismissal of a planned committee hearing has unexpected consequences for negotiations on the legal regulation of the crypto market. According to insiders, representatives of the crypto industry will speak with Democratic senators again next week, after the scheduled session of the Senate Banking Committee was suddenly postponed.

Sudden dismissal of banking commission hearing shakes market

The dismissal of the hearing on Wednesday afternoon caused unrest in the negotiation camps. The Senate Banking Committee had scheduled a marking session — a formal meeting where committee members can change, discuss and vote on legislation — but withdrew it at the last minute. This decision came when it became clear that not all parties supported the bill.

The dismissal gained extra weight when it emerged that Coinbase, one of the largest US crypto exchanges, had withdrawn its support for the proposal. This withdrawal of a prominent industry player took much of the momentum out of the negotiations, making some Democrats (and some Republicans as well) more cautious about the bill.

Stablecoins and rewards programs at the heart of negotiations

Next week’s call will see Democrats from both the banking committee and the Senate Agriculture Committee participate, along with representatives from crypto firms and policy advocates. The agenda promises to be full of topics.

Most likely, the discussion about reward programs for stablecoins will be central. This was a compromise topic that Democrats, Republicans, bank lobbyists, and crypto representatives had previously worked on. The question of how these incentive mechanisms should be legally regulated remains controversial and will be discussed again.

Two committees, one goal: tighten up the bill

While the Senate Banking Committee has postponed its marking session, the Senate Agriculture Committee is still scheduled to hold a hearing in early February. There, committee members will be able to discuss amendments to the underlying bill and ultimately vote on it.

For the Democrats, it is important that the bill can count on broad support. In their opening statements, they urged committee chair John Boozman that they were pushing for cross-party legislation, stressing that both political parties want to get behind a regulated crypto framework. How this balance with the recent dismissal will be achieved remains to be seen.