Washington’s Crypto Moment Turns Political
After months of quiet negotiations and cautious optimism, U.S. crypto legislation has entered a decisive—and divisive—phase.
The Senate Agriculture Committee has released updated text for its long-awaited crypto market structure bill and scheduled a markup for January 27. The move comes despite failing to secure Democratic support, signaling a potential shift from bipartisan compromise to partisan momentum.
Chairman John Boozman didn’t sugarcoat the situation. While acknowledging that “differences remain on fundamental policy issues,” he confirmed the committee would press forward, thanking Senator Cory Booker for collaboration that, in his words, ultimately made the bill stronger—even if consensus proved elusive.
Two Committees, Two Paths, One Narrowing Window
The Agriculture Committee’s decision to advance the Digital Commodity Intermediaries Act contrasts sharply with delays on the Senate Banking Committee side.
The Banking panel has postponed work on its competing proposal—the CLARITY Act—until late February or March. Instead, lawmakers are pivoting toward housing legislation following President Trump’s renewed push for affordability, which he has labeled a core “American Dream” priority.
That delay came at a cost. Coinbase CEO Brian Armstrong publicly withdrew support for CLARITY, calling parts of it “catastrophic,” particularly provisions limiting tokenized equities and yield on stablecoins.
The White House pushed back hard.
Patrick Witt, Executive Director of the President’s Crypto Council, warned that waiting for a “perfect” bill could backfire badly. Delay, he argued, risks future Democratic lawmakers writing far harsher rules after a crisis—“à la Dodd-Frank.”
“You might not love every part of the CLARITY Act,” Witt wrote, “but I can guarantee you’ll hate a future Dem version even more.”
Trump Signals Urgency—and Confidence
Fueling the urgency, President Trump told attendees at Davos 2026 that he expects to sign crypto market structure legislation “very soon,” reiterating his administration’s goal to keep the U.S. the global crypto capital.
Yet Democratic resistance is intensifying, particularly over ethics. Senator Adam Schiff has demanded guardrails that explicitly cover the White House, while Senator Ruben Gallego has drawn a firm line, calling ethics protections a “red line.”
Those concerns have become a central obstacle to bipartisan agreement.
Stablecoins: The Fault Line Splitting Washington—and Wall Street
At the heart of the legislative standoff lies one explosive issue: stablecoin yield.
The CLARITY Act takes a restrictive approach. Its Section 404 bans crypto firms from paying interest simply for holding payment stablecoins, while still allowing rewards tied to activity—such as transactions, loyalty programs, staking, or governance participation.
The Agriculture Committee’s bill charts a very different course. It excludes “permitted payment stablecoins” from CFTC oversight entirely, deferring regulation to other frameworks like the GENIUS Act instead of imposing explicit yield bans.
This divergence has fractured industry opinion—and alarmed banks.
Bank of America CEO Brian Moynihan recently warned that up to $6 trillion in deposits could flow into stablecoins. JPMorgan CFO Jeremy Barnum went further, calling yield-bearing stablecoins “a parallel banking system” that offers interest without traditional safeguards.
Meme Coins, Developers, and Regulatory Turf Wars
Beyond stablecoins, the updated bill makes several notable moves:
Meme coins are explicitly classified as digital commodities under CFTC jurisdiction, defined as speculative assets driven by internet culture and hype-driven communities.
The bill creates an Office of the Digital Commodity Retail Advocate within the CFTC, aimed at protecting everyday users.
Software developers receive protections from being regulated as intermediaries.
CLARITY, by contrast, introduces the concept of “ancillary assets” and proposes a joint CFTC-SEC Micro-Innovation Sandbox for startups. But its developer protection language has raised red flags. Judiciary Committee leaders Chuck Grassley and Dick Durbin warned it could limit prosecutors’ ability to pursue financial crime cases.
Galaxy Digital also cautioned that CLARITY could grant the Treasury sweeping surveillance powers, including freezing transactions for up to 30 days without court approval—drawing uncomfortable comparisons to the Patriot Act.
Industry Divided, Adoption Marches On
Despite the political drama, crypto adoption hasn’t slowed.
Clear Street analyst Owen Lau notes that institutional use cases continue to expand “even without a favorable CLARITY Act,” as major financial institutions quietly deepen their blockchain exposure.
Meanwhile, Armstrong has struck a more conciliatory tone, saying Coinbase is exploring compromises with bank CEOs to find a “win-win” solution—an acknowledgment that crypto’s future in the U.S. will require coexistence, not confrontation.
The Bigger Picture
The Senate’s crypto debate is no longer just about regulation—it’s about control, trust, and who shapes the next financial system.
With bipartisan talks stalled, the Agriculture Committee’s move marks a turning point. Whether this bill becomes law or sparks a deeper partisan divide, one thing is clear: crypto policy in Washington has entered its most consequential chapter yet.