Lawmakers "like steamrollers": Cryptocurrency, traditional finance, and Senate Banking Committee members meet to discuss crypto legislation

Lawmakers are like a "steamroller," moving forward in the direction of advancing cryptocurrency legislation. On Wednesday, industry advocates and traditional financial giants met with senators to discuss the bill.

According to a source familiar with the matter who spoke to The Block, the meeting lasted about an hour and a half. Attendees included members of the Senate Banking Committee, the Blockchain Association, the Crypto Innovation Council, as well as the Financial Services Forum and the Securities Industry and Financial Markets Association from the traditional finance sector.

Coinbase US Vice President of Policy Kara Calvert stated: "I think they are like an unstoppable steamroller, moving forward with the price increase in January. They have made tremendous progress over the past few weeks."

The Senate Banking Committee has a draft aimed at regulating the entire cryptocurrency industry. Some measures include dividing jurisdiction between the two main federal agencies—the Securities and Exchange Commission and the Commodity Futures Trading Commission—and creating a new term, "ancillary asset," to clarify which cryptocurrencies are not considered securities. Optimistic There were previous reports that the Senate Banking Committee would hold a hearing before the end of the year to amend and vote on the bill. But earlier this week, a spokesperson for the Senate Banking Committee confirmed that the review would have to be postponed until the new year.

Chamber of Digital Commerce CEO Cody Carbone described the meeting as productive in a memo.

Carbone said: "Today's productive meeting with key Senate banking leaders has strengthened my confidence that, even though the Senate committee did not hold any hearings on digital assets this week, market structure is still making progress." Who was in the room at the time.

Carbone said that the meeting was chaired by Senate Banking Committee Chairman, South Carolina Republican Senator Tim Scott. According to sources, Democratic Senator Mark Warner was present, while the committee's top Democrat, Senator Elizabeth Warren, did not attend.

Issues discussed at Wednesday's meeting included how to define securities and commodities, decentralized finance, and how to identify intermediaries. In addition, the meeting also discussed issues related to stablecoin yields.

The banking and cryptocurrency industries have long been divided over the treatment of yield-bearing stablecoins.The banking association believes that there are some loopholes in the stablecoin bill (called GENIUS) passed this summer that need to be addressed. They point out that the key issue is that the bill does not sufficiently restrict stablecoin issuers from paying interest to holders, which could make stablecoins a more attractive store of value and credit mechanism, rather than just a means of payment, thus creating "distorted market incentives" for the banking sector.

Meanwhile, some in the cryptocurrency industry believe that allowing crypto companies to pay interest on stablecoins is "healthy competition."

At Wednesday's meeting, when asked about the relationship between cryptocurrency and TradeFi participants, Calvert noted that there were some tensions.

Calvert said: "The atmosphere was tense, but not hostile. My impression is that no one seems to want to veto this bill. I think that's important."

Calvert added that although there are differences, everyone hopes to reach a compromise.

"Ultimately, you will see some members have to make some tough decisions," she said.