The cryptocurrency industry and TradFi act as a coordinated "wheel" in advancing the Senate bill.

Momentum around digital asset regulation is gaining momentum. This week, representatives from the crypto sector and traditional finance gathered behind closed doors to discuss the Senate Banking Committee’s bill, which aims to reshape the landscape of the US digital economy.

Who is driving the “regulation” train

Senate Banking Committee Chairman, Republican Tim Scott, held a meeting attended by key figures from both sides of the aisle. Participants included Democrat Mark Warner, while Democratic Committee Chair Elizabeth Warren was absent. Additionally, representatives from the Blockchain Association, Crypto Council for Innovation, Financial Services Forum, and Securities Industry and Financial Markets Association were present.

Carla Calvert, Vice President of US Policy at Coinbase, described the atmosphere as tense but positive: “It seems that no one wants to block this bill. The atmosphere is tense but not hostile.”

What the bill proposes

The legislation aims for comprehensive regulation of the cryptocurrency industry through the division of authority between the SEC and CFTC. The key innovation is the introduction of the term “auxiliary asset” for clear classification of cryptocurrencies that are not securities.

Wednesday’s discussions focused on fundamental questions: how to define securities and commodities, how to regulate decentralized finance, and what status intermediaries should have.

Stablecoins — a point of tension between sectors

One hot topic remains the permission for stablecoin issuers to pay interest. The banking sector sees this as a threat to its position, calling for restrictions on such payments to keep stablecoins solely as a payment instrument.

Crypto industry representatives advocate for the right to pay interest as “healthy competition.” Despite disagreements, Calvert emphasizes that both sides are trying to find a compromise: “Despite our differences, everyone is striving to reach an agreement.”

Schedule delayed, but momentum persists

Although earlier this week a committee spokesperson confirmed the postponement of the vote to the new year, Cody Carbone, CEO of Chamber of Digital Commerce, remains optimistic. He called the meeting “productive” and emphasized that market structure continues to evolve regardless of delays in the review schedule.

Calvert summarized: “They are moving like an unstoppable train toward January. Significant progress has been made over the past few weeks.” Regulatory competition between the US and other jurisdictions evidently adds urgency to this process.