Washington’s battle over cryptocurrency regulation could set up a potential clash between pro-crypto Democratic lawmakers and Senator Elizabeth Warren, a longtime fault-finder of the digital assets industry. The divide comes just months into Warren’s tenure as the liberal leader on the Senate Banking Committee, placing her at odds with some members of her party.
Republican lawmakers, who now have Congressional control with a 53 to 47 lead over Democrats, want to make the United States the “crypto capital of the planet” in support of President Donald Trump’s pro-crypto policies.
But to see through the laws that Trump would like in play, they need about 7 votes from the opposing party. Chatter around Washington says that in the coming months, their plea could be answered.
Crypto legislation gains Bipartisan support
“There’s a number of Democratic senators who do want to get involved in this space,” said Senator Kirsten Gillibrand, who has helped craft several Republican-led digital asset legislations.
According to a Wednesday Politico exclusive, Gillibrand is actively working to bring more left-wing aligned policymakers across the board. Democrats now see an opportunity to engage with an industry that has gone up in popularity, particularly among younger voters and communities of colour.
Senator Warren has coined herself a watchdog against the risks posed by the crypto industry to the US economy. She has advocated for stricter anti-money laundering controls and consumer protection measures, arguing that digital assets should be subject to the same regulations as traditional financial systems.
“I believe that Democrats understand the importance of consumer protections and anti-money laundering curbs in any new financial product,” Warren told reporters last week. “All we’re looking for is a level playing field between crypto and all of the other financial systems.”
The “hawkish” stance could put her at loggerheads with some Democratic party members, including Arizona Senator Ruben Gallego. Gallego supported an industry-backed crypto bill in the House last year and made it clear he intends to act independently on the issue.
“I’m going to vote to represent what I think Arizona actually thinks about crypto and how it fits into the economy,” Gallego said in January, postulating his differences with Warren on the matter.
On crypto, Warren’s leadership will get tested
The Massachusetts Senator’s position at the Senate Banking Committee seemingly hasn’t phased “defecting” dems on financial regulation issues. The crypto debate will certainly test her influence on the party’s members, and she could likely fail to convince them to back her sentiments.
Some senior Democrats, including Mark Warner, have said they are willing to engage in discussions over crypto regulation. Warner, a former venture capitalist and a senior member of the Banking Committee, previously had several altercations with Warren on financial issues.
“I’m looking to engage on this topic,” Warner told Politico. He lauded the crypto industry for showing some resilience after the collapse of Sam Bankman-Fried’s FTX empire.
“Having some kind of regulatory format makes sense,” Warner added.
Stablecoins legislation proposal ‘not good enough’ for Warren
Owing to her comments during the Senate Banking Committee “Debanking” hearing that took place on February 5, Warren has shown some openness to stablecoin legislation. Still, she has strongly opposed the current proposal championed by Senator Bill Hagerty.
The 75-year-old senator believes stablecoins pose risks to financial stability, warning that banks holding digital assets could face threats to their balance sheets.
“Any forward movement in the crypto area needs to have strong consumer protections and guardrails against money laundering,” Warren said in a press briefing last week. “I’m concerned about the lack in both areas.”
Pro-crypto senators from both sides are working to rally enough support to bypass Warren’s reservations. Gillibrand said last week that at least seven Democrats are reviewing the proposed legislation, and crypto advocates are confident they can secure the votes needed for passage.
“We’re going to try to get to 60, meaning we need Democrats,” said “crypto mum” Senator Cynthia Lummis. “And I think we can get ’em.”
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