U.S. Senate back to crypto talks as industry's make-or-break bill faces time crunch

U.S. senators met Tuesday to begin talks again on the crypto bill that will set the market structure for digital assets, according to people familiar with the situation, though no further accords have been announced on the several points of debate between Democratic and Republican negotiators.

One of those meeting today, Senator John Kennedy, told Punchbowl News that the chairman of the Senate Banking Committee, Tim Scott, was planning for a bill markup next week on January 15. The committee would likely have to release an updated draft bill before the markup, but the latest draft was shared months ago.

After months of back-and-forth that failed to reach a finished product in last year's congressional session, the process begins anew for 2026, though lawmakers face a constrained and politically perilous calendar. Members of the Senate have been tussling over President Donald Trump's Venezuela actions, and they have a few weeks to meet a January 30 deadline for a federal spending plan that can head off another government shutdown, but crypto remains in the mix as another congressional priority.

If Scott presses for a markup next week, it could avoid some of the budget stress, but it's not likely to be a bipartisan effort unless the senators can very quickly resolve several outstanding points that Democrats have been pressing. The Democrats — some of whom were involved in the Tuesday meeting, according to the people familiar — have pressed for ethics standards in the crypto bill to ban senior government officials from profiting from digital assets activity, as President Donald Trump has. They're also seeking constraints on decentralized finance (DeFi) platforms and limits on crypto yield that could allow the industry to compete head-to-head with banks.

These are all sticky issues and potential deal-breakers for industry support of the legislation, though members of both parties have said they're motivated to make an agreement and pass legislation. If the timing suggested by Kennedy for next week comes to pass, it may force Democratic negotiators to oppose whatever is voted on, unless common ground has been reached.

Trump's crypto czar, David Sacks, had similarly suggested last month in a posting on social media site X that Scott committed to a January markup, though Scott hasn't yet made that commitment publicly.

Several sources of pressure are all combining to increase the urgency of crypto action in the Senate. The House of Representatives have long since approved its own Digital Asset Market Clarity Act to set up U.S. crypto regulation, so that chamber is waiting on the Senate. And the January 30 deadline looms to set a federal spending plan or risk a shutdown like the 43-day record-breaker from a few months ago. Also, this year will bring the midterm congressional elections that adds further political pressure and calendar constraints.

On Tuesday, the banking industry again reiterated its strong interest in using this bill to rehash last year's Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act to stop crypto affiliates from paying yield on stablecoins. That's been a months-long lobbying battle between the two industries, and the legislation produced by the Senate negotiations may determine which sector comes out on top.

Read More: What if crypto's U.S. market structure effort just never gets there?