U.S. Crypto Market Structure Bill Faces Delays Amid Bipartisan Stalemate

The advancement of a landmark U.S. crypto market structure bill has hit significant delays, with a key committee markup likely pushed to January 2025. The bill, intended to establish a comprehensive regulatory framework for digital assets, is stalled due to ongoing partisan disagreements and new demands from Senate Democrats.

According to reports, a closed-door meeting this week revealed that advancing the bill before the Christmas recess is increasingly unlikely. A major hurdle is a leaked three-page Republican compromise proposal, which offered to integrate front-end sanctions compliance for certain DeFi platforms in exchange for preserving protections for software developers and self-custody. The proposal also included Democratic requests for involving Democratic commissioners in oversight agencies and adding ethics language to prevent high-ranking officials from profiting from digital assets.

However, negotiations remain fraught. Senate Democrats have issued a new counterproposal demanding stronger rules on token classification, illicit-finance enforcement, market protections, and strict limits on stablecoin yields. They also insist on firm ethics rules to prevent public officials from trading or profiting from crypto, a point the White House has rejected, creating a major obstacle. Core disputes also persist over the division of authority between the SEC and CFTC.

Lawmakers involved express frustration and fatigue. Senator Bernie Moreno described the process as "decently frustrating," while Senator Cynthia Lummis noted that staff are "exhausted." With only seven working days left before the break, Senator Lummis aims to release a draft this week for industry review. Senate Banking Chair Tim Scott could still force a party-line markup next week, but securing bipartisan support—crucial for passage in the full Senate next year—may necessitate a delay until January.

Concurrently, the Senate Agriculture Committee, which released its own draft last month, may also hold a markup but Chairman John Boozman suggested a postponement to next year due to unresolved "difficult issues." Analysts note that despite the disorder, the debate has fundamentally shifted from whether to regulate crypto to defining the rules, signaling crypto's acceptance as a permanent part of the U.S. financial system.