The Republican Party is pushing for a cryptocurrency trading bill in the Senate, with "Trump family investment interests" being the biggest sticking point

Senate Republicans are advancing a comprehensive cryptocurrency trading regulation bill, but concerns from Democrats about Trump and his family's cryptocurrency investments have become the biggest political obstacle to the bill's passage.

On September 8, media reports indicated that Senate Republicans released a significantly expanded discussion draft of the cryptocurrency trading regulation bill, but they still face significant uncertainty in securing key Democratic votes. According to Republican aides, it is unclear what concessions need to be made to gain sufficient Democratic support.

Even with unanimous Republican support, the bill requires at least 7 Democratic senators' backing to move forward. Senate Banking Committee Chairman Tim Scott previously stated that as many as 18 Democrats might consider supporting the bill, but he also acknowledged that dissent within the party "is a real obstacle that needs to be overcome."

The latest version of the discussion draft has expanded from the original 35 pages in July to 182 pages, significantly reducing the discretion of regulatory agencies, bringing it closer to the House version passed in July. Despite 78 Democratic representatives voting in favor of the House bill, the resistance in the Senate is greater, with some Democrats demanding that the bill specifically address President Trump and his family's investments in the cryptocurrency space.

Democrats Focus on Three Key Policy Issues

According to Republican aides, Democrats have expressed concerns in several key areas.

First is the funding issue. Democrats have long complained that the Commodity Futures Trading Commission (CFTC), as a smaller financial regulatory agency, cannot charge fees to regulated entities to cover its operating costs. The House-passed Clarity Act already includes limited fee provisions.

Second is the representation issue. Democrats are concerned that the CFTC currently has only one commissioner in office (acting chair Caroline Pham), and more importantly, they oppose the lack of any Democratic appointees.

The third focus is the vertical integration issue. In traditional finance, exchanges cannot simultaneously act as brokers or trade with their own funds on their own platforms, but this is a common practice in the cryptocurrency world.

Trump Family Investments Become the Biggest Political Obstacle

Despite policy differences, the financial entanglements of Trump and his family in the cryptocurrency space remain the biggest sticking point. Some Democrats hope the bill will specifically address this issue.

According to Republican aides, there are currently no signs that concessions on the aforementioned policy points could sufficiently alleviate Democratic concerns about this political issue to secure enough votes for the legislation.

Senate staff noted that the digital asset space is currently effectively unregulated, and opposing any form of market structure regulation could mean abandoning the creation of some regulatory law in favor of zero regulation.

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