The crypto bill needs 7-10 Democratic votes to pass. The market is betting on this bullish catalyst.

The U.S. Senate is currently engaged in a political battle over cryptocurrency regulation. According to the latest news, the prospects for passing the Crypto Market Structure Act remain uncertain, but if ultimately approved, it could become a significant turning point for the development of the cryptocurrency industry. Galaxy Research Director Alex Thorn analyzed key data and market impacts of this political competition.

Political Feasibility: 7-10 Votes Short

The current Senate seat distribution is 53 Republicans and 47 Democrats. However, passing the bill requires 60 votes, meaning Republicans must secure support from 7-10 Democratic senators to pass it. This number may seem small, but in the context of current American political polarization, bipartisan cooperation is not easy.

According to relevant information, the Senate Banking Committee hearing scheduled for January 15 has been postponed, with a revised hearing expected to be held between January 26 and 30. This delay reflects significant disagreements in negotiations, requiring more time to seek compromises.

Core Content of the Bill and Controversial Points

Among these, the issue of stablecoin earnings has become the biggest point of contention. Banking lobbying groups worry that interest-bearing stablecoins could drain bank deposits, actively pushing for restrictions on stablecoin rewards. However, this clause is viewed as unacceptable by the stablecoin industry, with some even considering it a matter of survival. Besides, issues like DeFi compliance, restrictions on illegal activities, and tokenized securities innovation remain unresolved.

Industry Positions Diverge

Support for advancing the bill

Galaxy Digital CEO Michael Novogratz publicly stated that the bill can move forward even if it’s not perfect, “we can revise it later.” He believes the crypto industry has waited too long for clear regulatory standards, and legislative delays only slow down the entire sector’s development.

Opposition to the current draft

Coinbase CEO Brian Armstrong withdrew support due to dissatisfaction with several provisions, mainly concerning tokenized stocks, DeFi, stablecoin rewards, and SEC authority. This division reflects differing opinions within the industry on the bill’s details.

Market Reactions

Market responses to the bill’s uncertain prospects have already been observed. According to reports, after the news of the hearing postponement was announced, BTC and ETH fell about 2% that day, and crypto company stocks declined sharply, with Coinbase down 6.5%, Robinhood down 7.8%, and Circle down 9.7%. This indicates that the market remains sensitive to policy uncertainty.

Market Potential if Passed

If the bill is ultimately approved, Alex Thorn believes it will serve as a major bullish catalyst for mainstream adoption of cryptocurrencies. A clear regulatory framework would provide better guidance for institutional investors and businesses, facilitating the mainstreaming of digital assets.

Conversely, if the bill fails to advance, the overall impact on the crypto sector’s fundamentals may be limited, but negative market sentiment could emerge, especially among investors hoping for policy breakthroughs.

Key Focus Areas Moving Forward

The hearings scheduled for January 26-30 will be critical. The Senate Banking and Agriculture Committees will resume their review, with 137 proposed amendments to be addressed one by one. Negotiations will likely focus on sensitive issues such as stablecoin earnings, DeFi provisions, and regulation of tokenized securities.

Summary

The prospects for passing the Crypto Market Structure Act remain uncertain but not impossible. The Republican Party needs to secure support from 7-10 Democratic senators, which is challenging but achievable given the current political environment. The core value of the bill lies in providing a clear regulatory framework for the crypto industry, which, although potentially imperfect, is of great significance for the sector’s long-term development. The market has already reacted to this policy outlook, and the progress of the hearings from January 26-30 will be a key focus for investors. Regardless of whether the bill ultimately passes, this political battle reflects a broader trend of cryptocurrency regulation moving from the fringes to the mainstream political agenda.