Senate Agriculture releases its independent draft of the market structure legislation, lacking cross-party backing

Senate Advances Crypto Market Bill Without Developer Regulation

Developers working on the core infrastructure of cryptocurrencies would not be classified as regulated financial entities under the latest draft of U.S. crypto market legislation. This new text surfaced ahead of a scheduled Senate Agriculture Committee hearing next week.

However, the crypto market structure proposal appears to be progressing without the bipartisan consensus that industry advocates had anticipated. As lawmakers approach what could be the Senate’s first major vote on crypto market rules, the bill is moving forward primarily under Republican leadership. While Democratic support is crucial for the bill’s ultimate passage, the process is quickly approaching its initial test as a GOP-led initiative.

Committee Chairman John Boozman expressed gratitude for Senator Cory Booker and his team’s contributions, stating, “Their thoughtful input has helped us strengthen consumer protections and expand the CFTC’s authority.”

Boozman added, “Although there are still disagreements on key policy matters, this legislation builds upon our earlier bipartisan draft and incorporates feedback from various stakeholders. While it’s disappointing that a full agreement wasn’t reached, I appreciate the collaboration that has improved this bill. It’s time to move forward, and I look forward to the markup next week.”

According to several sources who spoke to CoinDesk, the Senate Banking Committee is not expected to take up its own crypto bill in the near future, especially after last week’s hearing was postponed.

The upcoming markup hearing, scheduled for Tuesday, offers Democrats a chance to propose changes to the bill before it reaches a full Senate vote. Another opportunity for amendments could arise when the versions from the Agriculture and Banking Committees are merged for consideration by the entire Senate.

For now, the Agriculture Committee has released a working draft that various stakeholders can begin to analyze. This version reflects a more Republican, pro-crypto stance and omits some of the more contentious provisions—such as those related to stablecoin yields and illicit finance—that fall under the Banking Committee’s jurisdiction.

If the committee proceeds with its planned January 27 markup, this bill will be the first of its kind to reach this stage after years of crypto industry lobbying, which has previously seen more success in the House, including the passage of the Digital Asset Market Clarity Act last year.

Key Provisions and Political Dynamics

The current Senate bill maintains legal protections for developers, provided they do not have control over customer assets. It also positions the Commodity Futures Trading Commission (CFTC) as the primary regulator for spot markets involving tokens like bitcoin (BTC) that are not considered securities. Industry advocates are expected to scrutinize the bill’s language in the coming days.

One of the industry’s longstanding goals has been to ensure that decentralized finance (DeFi) platforms are not subject to regulations that would be difficult for them to comply with. While Democrats have expressed concerns about consumer protection, and traditional financial interests argue that DeFi should be regulated similarly to banks, DeFi supporters maintain that such requirements are unworkable.

Additional Democratic concerns include former President Donald Trump’s reluctance to appoint Democrats to regulatory agencies such as the CFTC and SEC. Some Democrats have also called for ethics rules to prevent senior officials, including Trump, from personally profiting from crypto.

Chairman Boozman had hoped to continue bipartisan negotiations on the Agriculture Committee, even after talks in the Banking Committee broke down amid a contentious push for a markup. While his committee has typically valued bipartisan results, it may proceed next week without Democratic endorsement.

For the Clarity Act to become law, it will need the support of at least seven Senate Democrats. Should it clear the Senate, it is expected to pass easily in the House, where crypto legislation has previously received broad bipartisan backing.

Regardless of industry opinion, the bill must clear both the Agriculture and Banking Committees before advancing. The Banking Committee’s negotiations remain particularly challenging, with disputes over issues like whether stablecoins can offer customer rewards—a point of contention for bank lobbyists who argue it could undermine traditional deposit-taking.

Coinbase withdrew its support over these and other disagreements just before the planned markup, and the Banking Committee has yet to announce its next hearing.

With the Agriculture Committee’s draft now public, various stakeholders have a concrete proposal to debate.

Outlook for Comprehensive Crypto Legislation

During a recent event in Switzerland, Trump indicated that the U.S. would soon enact broad crypto regulations, a message echoed by a senior White House crypto adviser.

“It’s not a matter of if, but when,” Patrick Witt wrote on X. “Believing that a multi-trillion-dollar industry can operate indefinitely without a comprehensive regulatory framework is unrealistic.”

Update (Jan. 22, 01:16 UTC): Additional information has been included.