Senate Banking Committee to vote on crypto oversight split

The Senate Banking Committee will vote this week on legislation that would divide oversight of crypto markets between the Securities and Exchange Commission and the Commodity Futures Trading Commission and establish federal rules for digital asset firms. The bill returns to the panel after a January effort collapsed amid disputes between banks, crypto companies and lawmakers. Committee Chair Tim Scott has sought support from all 13 Republican members before advancing the measure. Lawmakers in Washington expect the committee vote this week, with the text still subject to change before consideration by the full Senate.

A central dispute concerns whether stablecoin issuers can offer rewards to holders without creating bank-like interest. Banking groups warned the bill’s wording could allow stablecoin programs to mimic interest-bearing deposits and pull funds from traditional banks. Opponents cautioned that such outflows could pressure bank funding and affect financial stability.

Senators Thom Tillis and Angela Alsobrooks proposed an amendment intended to let crypto firms offer certain incentives while preventing yields that resemble bank interest. The change won public support from major crypto firms, including Coinbase. Banking groups criticized the amendment, saying it “fails” to protect deposits. On the social platform X, Tillis wrote that banks may object but “we respectfully agree to disagree.”

Democrats on the committee raised separate concerns, including calls for tougher anti-money-laundering requirements and language to limit elected officials from profiting from digital asset projects. Supporters of the current draft contend some issues can be addressed through amendments after the committee vote; critics warned the window for negotiation is short.

The House passed its version of the Clarity Act in July. For a final bill to reach the president, the Senate must pass its version before the end of 2026. With Republicans holding a Senate majority, backers will still need the affirmative votes of at least seven Democrats to secure passage in the full chamber.

The legislation has drawn attention because of business ties between the Trump family and a token project called World Liberty Financial. Investors provided more than $550 million across two fundraising rounds, and the project later sold about 5.9 billion tokens to accredited private investors. Early buyers were allowed to sell 20% of their holdings last year, and some purchased tokens for as little as 5 cents. Promotional materials once listed Donald Trump and developer Steve Witkoff as co-founders before that page was removed.

White House communications director Anna Kelly stated that the president does not manage family business interests and that his assets are held in a trust managed by his children, adding, “There are no conflicts of interest.”

Supporters of the bill argue federal rules would provide clearer standards for investor protection and market integrity. Opponents from banks and some Democrats contend the current draft does not adequately address deposit safety, enforcement against illicit finance or conflicts of interest. Lawmakers and industry groups expect the committee vote to set the stage for final negotiations in the Senate.