The U.S. Senate was originally scheduled to proceed with the first round of procedural voting on the Digital Asset Markets Clearing Act on Tuesday afternoon, but as of before the voting, the bill still did not have enough votes to pass. Republicans and Democrats continued to be at an impasse over the revisions, and market expectations for the bill to move to the next stage significantly cooled down.
The two parties have still not reached a compromise.
Republican lawmakers announced a new version of the market structure bill over the weekend, claiming that this was the final proposal. The Democrats subsequently put forward counter-proposals on Monday evening, but the Republicans did not accept them.
The Republican senator participating in the negotiations, Cynthia Lummis, stated that the Democratic Party's new proposal has hardly changed from their stance before the recess. She said that the Republicans have made adjustments in several areas, but the Democrats "have not taken a single step forward."
The Democratic Party, on the other hand, presents a contrary view. Elizabeth Warren, the Democratic leader of the Senate Banking Committee, stated that the version introduced by the Republicans over the weekend was not the result of consultation with the Democrats, but rather a text agreed upon between the Republicans and the White House. She believes that the relevant amendments did not truly resolve the controversy.
The prospects for the first round of voting are weak.
The Washington Policy Research Institute Beacon Policy Advisors stated in a client briefing that, given the Democratic Party's general skepticism towards the Republican Party's latest proposal, it is unlikely that the bill will gain enough votes to move forward on that day, unless there are significant changes at the last moment.
TD Cowen Policy Analyst Jaret Seiberg estimates that the probability of the bill failing in the first round of voting is about 60%. According to his judgment, if the vote fails, the reasons may include Democrats believing that the Republican amendments are still not sufficient, and at the same time, some Republican lawmakers may also vote against it due to issues with stablecoin profit mechanisms or law enforcement.
According to the convention of the U.S. Senate, this vote is a procedural one, primarily serving to initiate debate and proceed with the amendment process. Therefore, even if it passes in the first round, it does not guarantee that the bill will ultimately be approved; however, if it fails in the first round, the chances of continuing to advance during this legislative session will significantly narrow.
Banking and regulatory powers remain a focal point.
Apart from the opposition from Democrats, there is no unity within the Republican Party either. Some Republican lawmakers are concerned that if the bill fails to address the banking industry's concerns regarding stablecoin incentive programs, the base of bank deposits could be impacted, which would also affect their voting stance.
The banking industry made it clear on Monday that the final version proposed by the Republicans still did not address their core concerns. In response, on Tuesday, the White House cited economic data to argue that such concerns were unfounded.
Meanwhile, White House advisor on crypto affairs Patrick Witt stated at an industry event in Washington that even if legislation is hindered, the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) will continue to advance their respective crypto regulatory agendas. However, SEC Chairperson Paul Atkins has also repeatedly mentioned that regulatory rules lack legal support and thus have limited stability; moreover, the CFTC's direct regulatory authority over the crypto spot commodity market has always been insufficient.
Industry lobbying groups called on senators on Tuesday to cast a yes vote at least in the first round of voting in order to preserve the possibility for continued negotiations. If the voting proceeds as planned and the bill is not passed, it is likely that this legislation will come to an end during this congressional session.
