US Senate crypto bill collapses in blow to industry

Notably, the United States Senate has failed to advance comprehensive cryptocurrency legislation backed by President Donald Trump in a major blow for digital-asset firms and Republicans who had championed the bill for months.

Key points

• Four Republican senators – Jerry Moran, Rand Paul, Josh Hawley and Thom Tillis – joined all the Democrats in voting against it.
• Massachusetts Senator Elizabeth Warren, the top Democrat on the Senate Banking Committee, remarked the bill posed "massive risks to families, our national security, and our economy".
• The Trump administration's own extensive rollback of dozens of SEC and consumer watchdog policies introduced under former Democratic President Joe Biden has underscored that risk.
• Trump, who has earned more than $1.4bn from his family's crypto ventures, had pressed Congress to pass it.
• According to Industry experts have, only Congress can create a lasting regulatory framework.

Notably, the Digital Asset Market Clarity Act failed on Tuesday to secure the 60 votes needed to advance to a debate in the Senate, with safeguards governing Trump's extensive crypto interests among the biggest obstacles to a accord.

Four Republican senators – Jerry Moran, Rand Paul, Josh Hawley and Thom Tillis – joined all the Democrats in voting against it. The vote was 50-49 in favour.

As Congress is due to depart Washington this month ahead of the November midterm elections in which Trump's fellow Republicans are fighting to retain control of the House of Representatives and Senate, the vote effectively put the bill on ice.

"And if that's not bad enough, while Americans across the country suffer from an affordability crisis, this bill will turbocharge President Donald Trump's ability to rake in billions and billions of dollars from crypto, " she remarked.

Notably, the defeat dealt a major blow to efforts to establish the first comprehensive federal framework for digital-asset markets – and offered another illustration of Congress's struggle to keep pace with disruptive new technologies as lawmakers wrestle with a similarly fraught debate over artificial intelligence.

Tillis switched his vote from yes to no in a procedural move that preserves his ability to bring the measure back up for reconsideration afterwards. The dispute was not purely partisan.

Community banks fiercely resisted provisions allowing rewards on stablecoin holdings, arguing they could pull deposits out of traditional lenders and reduce funding available for farmers and small businesses.

Notably, a number of Republican senators additionally expressed reservations concerning those provisions, complicating party leaders' efforts to muster backing for the bill.

Notably, the deep-pocketed crypto industry spent hundreds of millions of dollars campaigning to advance the bill.

Trump, who has earned more than $1.4bn from his family's crypto ventures, had pressed Congress to pass it. Trump courted cash from the crypto industry on the 2024 campaign trail, calling himself a "crypto president".

His regulators, particularly the US Securities and Exchange Commission and the US Commodity Futures Trading Commission, will now be positioned to fill the crypto policy void, but efforts to write favourable rules for the digital-asset industry could prove challenging.

According to Industry experts have, only Congress can create a lasting regulatory framework. Without legislation, regulations will be vulnerable to a shifting political climate and court challenges, creating lingering hazards for the crypto industry, executives and analysts remarked.

Meanwhile, the Trump administration's own extensive rollback of dozens of SEC and consumer watchdog policies introduced under former Democratic President Joe Biden has underscored that risk.

Bitcoin, the world's largest cryptocurrency, fell more than 5 percent as the vote appeared set to fail, its biggest daily percentage decline since June. Shares of crypto exchange Coinbase and stablecoin issuer Circle fell as much as 10 percent.

For now, US Senate crypto bill collapses in blow to industry remains the part of the story worth watching, and further updates are likely as more details are confirmed.