Republicans and Democrats Remain Divided on Crypto Market Structure Bill Despite New Draft
Washington's crypto stalemate just got a fresh coat of paint—and the cracks are still showing. A new draft of the long-awaited market structure bill hit the Hill, but the partisan divide over digital assets remains as wide as ever. Forget consensus; we're watching a high-stakes game of regulatory chicken.
The Core Conflict: Innovation vs. Investor Protection
Republicans are pushing for clear rules of the road—frameworks that let builders build without the constant threat of enforcement actions. They see the current regulatory fog as a national competitiveness issue. Democrats, meanwhile, are digging in on guardrails, demanding ironclad consumer protections before signing off on any new regime. The new draft tries to bridge the gap, but early whispers suggest it's leaning towards industry-friendly definitions that could leave the SEC's turf diminished.
What's Really at Stake? Market Clarity—or Chaos.
The bill aims to finally answer the billion-dollar question: what is a security, and what is a commodity, in the crypto world? Clarity would unlock institutional capital and provide a U.S. alternative to offshore hubs. Continued deadlock, however, guarantees more regulatory arbitrage and legal uncertainty—the kind that sends projects and capital fleeing to friendlier jurisdictions. It's a classic D.C. dilemma: perfect becomes the enemy of the functional.
Bottom Line: The political theater continues while the market waits. Until both sides find a compromise that doesn't look like total surrender to their bases, this bill is going nowhere fast. And Wall Street? They'll keep minting fees on traditional products, quietly hoping this whole 'decentralized' thing just fades away.
Crypto bill sparks debates among individuals in the industry
Regarding legislation on crypto market structure, sources close to the situation, who wished to remain anonymous, as the talks were private, unveiled that the CORE objective of the bill is to formulate comprehensive oversight guidelines for cryptocurrency markets under the guidance of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
Nonetheless, James Murphy, popularly known as MetaLawMan, a prominent crypto lawyer and former securities litigator who pivoted his practice to focus on digital assets, claimed that the bill establishes a framework that exempts the decentralized finance (DeFi) sector from CFTC oversight.
To clarify this point, the crypto lawyer noted that the bill safeguards DeFi software developers and certain service providers from liability under the CFTC’s regulations. Moreover, he argued that stablecoin yields are not regulated under this crypto bill because they are subject to oversight by the Banking Committee.
On the other hand, Bill Hughes, a lawyer at Consensys, which provides ethereum software solutions, weighed in on the matter as debates continued to heat up.
Hughes mentioned that, “In summary, the Digital Commodity Intermediaries Act: Does not regulate self-custody wallets; Does not regulate non-custodial DeFi interfaces; Regulates any platform that takes custody or controls execution; and Focuses specifically on intermediaries rather than protocols or users.”
It is worth noting that the Republicans decided to release a draft of the crypto bill after news that a potential delay in moving the Senate Banking Committee’s revised crypto market structure bill to the next stage hit headlines, suggesting the delay will end in late February or March.
Crypto bill faces delays amid Senate Banking Committee’s shift in focus
Regarding the delay in the crypto bill, reports noted that the Senate Banking Committee contributed to it after shifting its focus from the bill to US President Donald Trump’s affordability agenda.
Concerning this agenda, sources mentioned that the President issued an executive order on Tuesday, January 20, restricting Wall Street investors from buying single-family homes. According to Trump, this move is part of his administration’s long-standing goal of lowering costs ahead of the November US midterm elections.
On Wednesday, January 21, a reliable source indicated that the Banking Committee WOULD make the President’s executive order its main focus, thereby delaying the bill’s progress until February or March.
This situation could signal another delay for the Senate on this bill, after it faced delays from both the Banking and Agriculture Committees, which are seeking bipartisan backing.
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