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The Trump administration is going all out to convince Senate Republicans to advance landmark cryptocurrency legislation over banks’ concerns.
Officials plan to launch an interactive tool on Tuesday that allows users “to set the parameters, run the scenarios, and see for themselves” why the Council of Economic Advisers previously concluded “there is no meaningful relationship between stablecoin growth and community bank deposit flight,” Chair Chris Phelan told Semafor.
The goal: push back on banking groups, which said Monday that recent changes didn’t go far enough to make them comfortable with the bill’s stablecoin provisions.
Multiple Republican lawmakers, including Sen. John Cornyn of Texas, have indicated they could take the banks’ side by voting “no” on Tuesday afternoon.
Crypto-friendly Democrats, meanwhile, are unhappy with the extent to which the latest text would rein in President Donald Trump.
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“I’m not sure [the latest text] addresses the issues I’m concerned about, which is what community bankers are concerned about,” Cornyn told Semafor Monday night. He added that he’s “looking forward to having a conversation and seeing where the votes are.”
The bill, which would divide oversight of digital assets between the SEC and CFTC, needs the support of at least 60 senators to move forward. CEA’s new website will also include an FAQ on its earlier report and responses to its critics.
“The CEA analysis is clear: the data simply does not support the deposit flight narrative that DC bank lobbyists are pushing on stablecoin rewards,” Patrick Witt, executive director of the president’s Council of Advisers for Digital Assets, said. He added that the Clarity Act “includes real safeguards to protect community banks if the deposit flight scenario ever did materialize” but “banks get none of those protections if the bill fails.”
Crypto-friendly Democrats have focused their criticism on revised ethics provisions that they say still don’t do enough to curtail Trump. Sen. Adam Schiff, D-Calif., argued they would “cover federal employees other than the president, functionally” and “not apply, in the current form, to the first family.”
“I don’t think the ethics provision is near enough,” Sen. Mark Warner, D-Va., said. “I’m really concerned.”
But they’re keeping their powder mostly dry as they seek to respond to the latest draft before Tuesday’s vote. Sen. Andy Kim, D-N.J., said he had several issues with the bill but would “continue to engage and push” on the ethics provisions “because right now, we don’t have any real rules” for digital assets.
“A week ago I would have said that didn’t look good, but we’ll see if that’s changed,” Senate Majority Leader John Thune told Semafor.
Step Back
The crypto industry is waiting on the vote to deploy tens of millions of dollars in campaign cash. That war chest doesn’t loom as large as it did last cycle, given how little time remains before midterms, how few Senate Democrats are up for reelection in competitive races — and, most crucially, how many progressives are seizing on it as a political liability.
“No one who’s in-cycle cares” about the money, a Senate Democratic aide said. Compared to spring 2024, “it’s just not that much of a concern anymore.”
That’s not true for everyone: Some House Democrats were panicked Monday that the industry’s leading network of super PACs may not spend in their races despite their support of the bill earlier this Congress, people familiar with their thinking told Semafor. Some of the legislation’s top House Democratic backers hail from purple districts where they would benefit from any outside help.
“When it comes to a statewide general election, the vast majority of voters are just seeing the ads that are playing between now and November, not double-clicking to see or care who is funding them,” a cryptocurrency executive said.
A person close to crypto PAC Fairshake told Semafor that its plans for this cycle haven’t been finalized or shared. The person added that Fairshake has already spent more than $30 million on Democratic candidates this cycle.
Sen. Jon Ossoff, D-Ga., is still undecided, he told Semafor Monday night. The Georgia Democrat is his caucus’ only incumbent in a tough race.
“I haven’t read it yet,” Ossoff said. “I read things before I vote.”