Trump-Era Crypto Push Stalls Amid GOP Senate Infighting

Trump-Era Push to Make U.S. a Crypto Hub Faces GOP Infighting Over Digital Asset Bill

Optimism Meets Resistance in Washington

With Donald Trump back in the White House, hopes have been rising that the United States could finally position itself as a global leader in crypto regulation and innovation. Supporters within the digital asset industry have hailed the administration’s pro-business tone and deregulatory stance as a potential turning point for the sector.

Yet despite the optimism, those ambitions are now colliding with political realities on Capitol Hill. Efforts to pass a comprehensive Digital Asset Market Structure Bill are running into sharp divisions within the Republican Party itself — especially in the United States Senate.

Senator Kennedy Sounds the Alarm

On September 10, John Kennedy, a senior member of the United States Senate Committee on Banking, Housing, and Urban Affairs, urged caution over the proposed bill.

Kennedy made clear he does not support fast-tracking the legislation this month, throwing cold water on Tim Scott’s push to advance it by the end of September.

“I don’t think we’re ready. People that I talk to still have a lot of questions. I know I still have a lot of questions,” Kennedy told reporters.

Kennedy’s core concern is that the Digital Asset Market Structure Bill — which aims to split oversight responsibilities between the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) — could grant the crypto industry excessive influence in shaping its own regulatory guardrails.

This stance places Kennedy at odds with Chairman Tim Scott and several fellow Republicans, who argue that creating a clear, bipartisan regulatory framework is long overdue and essential for the U.S. to remain competitive.

Chairman Tim Scott Pushes Back

Responding to Kennedy’s remarks, Tim Scott’s spokesperson Jeff Naft underscored that this debate is far from new and has been building for years.

Naft noted that the original Responsible Financial Innovation Act, introduced in 2022 by Cynthia Lummis and Kirsten Gillibrand, has been under active Senate review since June. Lawmakers have sifted through thousands of pages of stakeholder feedback and held discussions with more than 160 industry and policy participants in preparation for a potential September markup.

“The House has already acted, and the Senate should not fall behind,” Naft said, referring to the lower chamber’s recent legislative activity on digital assets.

Scott and his allies argue that the lack of federal clarity has left crypto firms stuck in regulatory limbo, while other jurisdictions like the European Union and Singapore race ahead with comprehensive frameworks.

Fragmentation Deepens in the GOP

Despite Scott’s push, Republicans are increasingly splintered over the best path forward.

After the CLARITY Act passed the United States House of Representatives in July, Senate Republicans rolled out the GENIUS Act over the summer to establish rules for stablecoins pegged to the U.S. dollar.
Scott has spent months rallying support for a broader digital asset bill, working with GOP colleagues including Thom Tillis, Bill Hagerty, and Cynthia Lummis to release guiding principles.

Those principles advocate for:

A dual regulatory framework sharing oversight between the SEC and CFTC.
Clearer asset classifications to distinguish securities from commodities.
Robust anti-money laundering rules to protect investors while encouraging innovation.

Kennedy, however, dismissed these principles as merely a “baby step” compared to the sweeping Digital Asset Market Structure Bill now being debated.

His resistance underscores how internal GOP divisions threaten to stall the legislative process, even under a Republican administration.

Democrats Propose Rival Framework

Partisan splits are also widening. On September 9, a group of 12 Senate Democrats unveiled their own competing crypto framework.

Their proposal would:

Impose stricter disclosure requirements on crypto companies.
Mandate registration of digital asset platforms with federal regulators.
Bar lawmakers and their families from personally profiting from digital assets.

Crypto Regulation Advances in U.S. Senate Amid Bipartisan Push and Trump Controversy

While Republicans focus on unlocking industry growth, Democrats are framing their proposal around consumer protection and ethics, signaling that bipartisan compromise could be difficult.

Crypto Industry Intensifies Lobbying

Meanwhile, the cryptocurrency industry is pushing hard to get legislation across the finish line.

Brian Armstrong, CEO of Coinbase, has been among the most vocal supporters of Tim Scott’s September-end deadline. Coinbase and other major firms have poured millions of dollars into lobbying campaigns to secure regulatory clarity, arguing that the U.S. risks losing its competitive edge to international rivals if it delays further.

However, even within the Democratic Party and GOP, not everyone is on board. Andy Kim has warned against rushing the legislative process, emphasizing the need for careful debate given the potential impact on financial markets and consumer protections.

Regulators Step In with Joint Guidance

As Congress struggles to reach consensus, federal regulators are moving on their own.

The SEC and CFTC are expected to release joint guidance expanding access to spot crypto trading, which would allow traditional brokerages and exchanges to directly offer digital asset products.

Supporters say this could accelerate mainstream adoption and bring crypto under more formal oversight, while critics warn it may further muddy an already fragmented regulatory landscape.

If enacted, this guidance could temporarily sidestep legislative gridlock—but it would also raise questions about how far regulators can go without a clear statutory mandate from Congress.

The Clock Is Ticking

The mounting legislative gridlock casts growing doubt on whether the U.S. can finalize a comprehensive crypto market structure before global peers like the EU and Singapore solidify their dominance in digital asset regulation.

While Trump’s return to the White House has sparked hopes of a crypto-friendly policy era, those ambitions are increasingly colliding with:

Ideological divides within the GOP over how far to go in empowering the industry.
Partisan rivalry with Democrats pushing stricter consumer protections.
Regulatory agencies asserting their own authority in the absence of Congressional action.

Unless lawmakers can bridge these divides, the U.S. risks falling behind in the global race to shape the future of crypto finance.

Conclusion

The Digital Asset Market Structure Bill was meant to be a cornerstone of U.S. crypto policy under the new administration. Instead, it has become a flashpoint of political division, exposing deep fault lines within the Republican Party and across the Senate.

With John Kennedy urging caution, Tim Scott pressing ahead, and Democrats rolling out rival frameworks, the path to clear crypto legislation looks increasingly uncertain.

Meanwhile, the industry waits in limbo, regulators are stepping into the void, and international competitors are moving fast.

Whether the U.S. can transform Trump-era optimism into concrete policy—or watch the opportunity slip away—will depend on whether Congress can overcome its own gridlock in the critical months ahead.