Senator Kirsten Gillibrand, a Democrat from New York, expressed strong optimism regarding the advancement of the Senate Agriculture Committee’s updated legislation aimed at regulating cryptocurrencies. This sentiment comes even as Republicans and Democrats continue to navigate discussions to reach a consensus.
“Senators have been working on a bipartisan basis for the last six months pretty intensely, and we have two different bills,” Gillibrand stated in an exclusive interview. She elaborated that one legislative proposal is being developed within the Agriculture Committee, which holds oversight over the Commodity Futures Trading Commission (CFTC). Concurrently, a second bill is under consideration by the Banking Committee, which oversees the Securities and Exchange Commission (SEC) and broader banking regulations.
“Because these types of digital assets have some characteristics of both commodities and securities, you need regulation under both those committees,” Gillibrand explained, highlighting the dual nature of cryptocurrencies that necessitates a multi-faceted regulatory approach.
Though not a member of the Senate Agriculture Committee, Gillibrand has been actively involved in the negotiations surrounding crypto market structure. She clarified that the two bills, each addressing distinct aspects of the crypto market, are being pursued in parallel. “I think both senators on the Banking and Ag committee are working in a bipartisan way and in good faith,” she affirmed.
The Senate Agriculture Committee recently unveiled updated legislative text, building upon a previous bipartisan discussion draft. This refined bill aims to grant the CFTC expanded authority to regulate digital assets. Committee Chairman John Boozman, a Republican from Arkansas, acknowledged that “differences remain on fundamental policy issues,” but emphasized that the bill “builds on our bipartisan discussion draft while incorporating input from stakeholders and represents months of work.” He added, “Although it’s unfortunate that we couldn’t reach an agreement, I am grateful for the collaboration that has made this legislation better. It’s time we move this bill.” The committee has scheduled a markup for this legislation on January 27th.
Meanwhile, the Senate Banking Committee’s markup hearing for its draft text on digital assets, initially set for January 15th, was postponed at the last minute following opposition from key industry players, including Coinbase. When questioned about the potential for a similar delay concerning the Agriculture Committee’s hearing, Gillibrand acknowledged that certain areas still require bipartisan resolution but expressed confidence that the markup would proceed as scheduled.
Gillibrand further noted that the Agriculture Committee’s draft is still undergoing review. “Hopefully, the senators will work on a bipartisan basis to amend that draft to make it stronger, to make it better, to continue their negotiations in the areas where there wasn’t resolution,” she said. She recalled that an earlier iteration of the Agriculture Committee’s draft contained significant bipartisan compromises that appear to have been omitted, expressing her hope that these could be reincorporated.
**Senate Banking Committee Bill Remains in Flux**
Bipartisan negotiations are ongoing for the Senate Banking Committee’s draft legislation on crypto market structure, according to Chairman Tim Scott, a Republican from South Carolina. “I’ve spoken with leaders across the crypto industry, the financial sector, and my Democratic and Republican colleagues, and everyone remains at the table working in good faith,” Scott stated. A new date for the Banking Committee’s hearing has not yet been announced.
Gillibrand believes that “people want to get this done now” and anticipates continued work over the coming weeks.
Coinbase CEO Brian Armstrong, speaking from the World Economic Forum in Davos, Switzerland, articulated the company’s concerns regarding the Senate Banking Committee’s draft. He indicated that Coinbase’s legal and executive teams identified “some pretty serious issues in the draft text” and perceived a lack of a clear plan to address them. Armstrong felt an obligation to voice these concerns to “defend our customers’ rights.” He further elaborated in a social media post that the current version of the bill “would be materially worse than the current status quo.”
Specific points of contention for Coinbase included proposed amendments that could have impacted rewards on stablecoins and potentially allowed banks to hinder competition. The Banking Committee’s text reportedly proposed prohibiting stablecoin issuers from offering rewards for holding their tokens, suggesting such rewards should instead be tied to transaction completion or loyalty programs. This stance is seen as an attempt by the banking industry to close what they term a loophole in previous legislation, arguing that allowing stablecoin issuers to pay interest could lead to significant deposit outflows from the traditional banking system.
Gillibrand, who was a lead Democratic senator on the GENIUS Act and played a key role in its passage into law in July, expressed optimism about finding common ground. “I am optimistic that we can find some common-sense bipartisan language that satisfies everyone’s concerns on this issue,” she said, acknowledging that if further work is needed on the GENIUS Act, “we will keep working.” She reiterated that the original intent was to allow for rewards and points programs, but not to permit “interest-like products on stablecoins.” Lawmakers, she explained, aimed to provide the crypto industry an opportunity to demonstrate compliance while safeguarding against consumer confusion and protecting the stability of insured bank deposits. She emphasized that stablecoins are not FDIC insured and that the GENIUS Act ensured each stablecoin was backed by a U.S. dollar or its equivalent, a compromise she considered strong.
**Key Republican Ally Announces Retirement**
Gillibrand has been a consistent advocate for crypto legislation since 2022, notably co-sponsoring the Lummis-Gillibrand Responsible Financial Innovation Act with Senator Cynthia Lummis, a Republican from Wyoming. This bipartisan framework was designed to establish a comprehensive regulatory approach for cryptocurrencies.
However, Lummis announced in December that she will retire at the end of her current term. Her departure represents a significant loss, as she chairs the Senate Banking Committee’s crypto subcommittee and was instrumental in the passage of the GENIUS Act. Both senators have been actively engaged in current legislative negotiations. “It’s a huge loss to the U.S. Senate and it’s a personal loss to me,” Gillibrand commented on Lummis’ impending retirement.
Despite this development, Gillibrand affirmed her continued commitment to digital asset advocacy, viewing the sector as a vital source of entrepreneurship and innovation. “I don’t want China or Asia or other parts of the world to have the benefit of these industries because we are unwilling or unable to regulate it,” she stated. Gillibrand underscored that comprehensive regulation is the most effective means to protect consumers, safeguard traditional financial services, and enable U.S. entities to compete globally. She stressed the imperative for lawmakers to maintain bipartisan collaboration and continue negotiations to forge a robust regulatory framework for digital assets.
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