Senate Crypto Market-Structure Bill Markup Likely Delayed Until After Holidays
Negotiations over a high-profile U.S. crypto market-structure bill are stalling and a planned Senate markup that lawmakers hoped to hold before Christmas is likely to be delayed until after the holidays. Bipartisan talks between Republican and Democratic staff remain divided on key issues including DeFi compliance, protections for software developers and self-custody, and involvement of Democratic commissioners and ethics rules for officials. A leaked compromise from Senate Banking Republicans proposes front-end sanctions compliance for certain DeFi platforms in exchange for developer and self-custody protections. Key figures include Senate Banking Chair Tim Scott, crypto bill champion Senator Cynthia Lummis, and Senator Bernie Moreno, who signaled frustration with the negotiations. The Senate Agriculture Committee has an incomplete draft and may also postpone its markup. With few working days left before the Christmas recess, lawmakers may delay markup to pursue bipartisan support in January. Traders should note political uncertainty around the market-structure bill could sustain regulatory ambiguity, affecting risk sentiment and volatility in crypto markets.
Neutral
The likely delay of the market-structure bill creates sustained regulatory uncertainty rather than an immediate positive or negative shock. Short term, traders may see elevated volatility as market participants react to headlines and adjust positions around potential regulatory outcomes; asset prices could swing on rumors of stricter rules or protections. However, a postponed markup that preserves a path for bipartisan negotiation reduces the probability of a rushed, partisan bill that could impose abrupt, stringent rules—this limits downside tail risk. Historically, prolonged legislative uncertainty (e.g., drawn-out ETF decisions or SEC enforcement shifts) has produced choppy price action and periods of risk-off flows into stablecoins and cash, followed by recovery when clearer outcomes emerge. Long term, passage of a balanced, bipartisan bill that clarifies jurisdiction and protects self-custody/developer activity could be bullish for institutional participation and market maturation. Conversely, failure to reach consensus could prolong ambiguity and keep institutional capital allocation cautious. For traders: expect short-term headline-driven volatility and position sizing around event risk; use tighter risk controls ahead of committee actions and reassess exposures if a draft is released or a markup is scheduled.