Senate Reviews 100+ Amendments to Crypto Bill Amid Tensions

Members of the U.S. Senate Banking Committee have filed over 100 amendments to a critical crypto market structure bill ahead of its markup session scheduled for Thursday. The proposed changes tackle contentious issues such as stablecoin yield restrictions, protections for software developers, and government ethics rules.

According to a leaked list obtained by POLITICO, Democratic senators have introduced numerous amendments, while Republicans have focused on more targeted adjustments. Notably, the bill remains under intense scrutiny after a prior markup was delayed in January when major crypto lobbying group Coinbase withdrew its support.

The legislation seeks to clarify the roles of U.S. regulatory agencies in overseeing crypto markets. A version of the bill, dubbed the CLARITY Act, previously passed the House in July. Key sticking points remain, including provisions on stablecoins and prohibitions on government officials’ involvement in crypto activities.

One of the most divisive elements centers on stablecoin yield. The draft bill unveiled Monday prohibits third-party platforms, such as crypto exchanges, from offering yield programs on stablecoins that resemble interest-bearing bank deposits. Democratic Senators Jack Reed and Tina Smith have proposed tightening this restriction further, substituting the current “equivalence” standard with a more stringent “substantially similar” test.

Meanwhile, Democratic Senator Catherine Cortez Masto has proposed an amendment to protect software developers from being classified as money transmitters, a move welcomed by many in the crypto community. Another ethics-related amendment from Senator Chris Van Hollen aims to bar high-ranking government officials and their families from owning or promoting cryptocurrencies.

Republicans, who hold a majority in the Senate and the Banking Committee, have their own demands. While they generally support the bill, internal divisions exist. Senator Thom Tillis, for example, has indicated he won’t back the bill without certain provisions. To advance the measure, Republicans will need to secure Democratic support to meet the 60-vote threshold required to avoid a filibuster.

Other notable amendments include a proposal by Democratic Senator Andy Kim to reestablish the Justice Department’s National Cryptocurrency Enforcement Team, which was dismantled last year. Amendments addressing sanctions and institutional crypto involvement are also on the table.

The Thursday markup is expected to be a critical step in determining whether the bill progresses to the Senate floor. With both crypto lobbyists and policymakers deeply divided on key provisions, the outcome could shape the regulatory framework for digital assets in the U.S. for years to come.

Image source: Shutterstock