Latest on US Crypto Market Structure Legislation

Watch Latest on US Crypto Market Structure Legislation - Bloomberg on Dailymotion

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00:00Zach, there's a lot in here. It's very quick moving too. Something happened last night as well.

00:05We'll get to that. But first, break down this bill for us. What's in it?

00:09So the Senate Banking Committee released almost 300 pages of legislation late last night,

00:13really right up against their own deadline to begin marking up what would essentially create

00:19rules of the road and regulatory clarity that's been sought by the crypto industry for years now.

00:24This is the result of months of negotiations in the Senate between Democrats and Republicans,

00:28many of whom are on the Banking Committee and have been studying this issue closely.

00:32Obviously, the headline issue there is the treatment of stablecoin yields or rewards,

00:38which tries to strike a very delicate balance between the crypto exchanges who want to be able

00:42to reward their customers who do have their stablecoins on those exchanges versus traditional banks

00:47who are trying to prevent our run on deposits and are trying to prevent direct competition on that front.

00:52And so there's a lot of really key questions they have to work out if this panel vote on Thursday is going to be successful.

00:58So, Zach, who comes out ahead? Who likes this bill? The banks or the crypto industry?

01:04So I have not heard from the banks yet today, but I did get a statement from Summer Merchinger,

01:09who is the head of the Blockchain Association, one of the key lobbying groups here on Capitol Hill,

01:13who has a lot of concerns about even curtailing part of crypto exchanges' ability to offer rewards or interest

01:21or yield specifically to their customers who have stablecoins on those exchanges.

01:27This has been an ongoing battle. This is something that Democrats and Republicans have been talking about for a long time

01:32and something that could even change right up until the last minute in the Banking Committee when they mark up Thursday morning.

01:38And I think we really need to emphasize, too, that this bill could see numerous changes even once it gets to the floor of the Senate.

01:44Senate Majority Leader John Thune has said he wants to pass it sometime this year.

01:48And there's other senators who would probably have a lot of questions about what this bill would do

01:52and general questions about the technology itself.

01:55And any changes would have to be reconciled with the House's Clarity Act that they passed last year.

01:59And so this fight between the crypto industry and the traditional financial institutions

02:04has certainly changed the dynamics of this particular bill and will continue to for the months to come.

02:10Zach, just last question for you. How would you characterize the pushback that we've seen as of now from some members of the Senate?

02:17You're certainly going to have some Senate Democrats, including Senator Elizabeth Warren,

02:20who's the top Democrat in the Banking Committee, outright opposed to really anything that could clarify crypto's rules,

02:28either on the regulatory front or on the tax front, which is a separate legislative effort,

02:32especially if there's not certain protections against conflict of interest, certain ethics guardrails,

02:37including for the White House, given President Donald Trump's increasingly prominent role in the crypto industry

02:43and for that of his family, is something of a red line for a lot of Democrats.

02:46And so I think you're going to see a lot of Democrats vote against this bill sort of on principle.

02:51But if this bill does get across the finish line and get to Trump's desk,

02:54it's going to be on a very delicate bipartisan coalition here on Capitol Hill.