The cryptocurrency industry and traditional finance are moving like a snowball towards federal regulation

Representatives from the cryptocurrency sector and the banking industry have recently been actively working on crystallizing the regulatory framework for digital assets. According to information obtained by The Block, during an influential meeting, representatives from the Blockchain Association, Crypto Council for Innovation, and Financial Services Forum, together with members of the Senate Banking Committee, held a detailed dialogue regarding the prospective legislation.

Karla Calvert from Coinbase described the pace of legislative work as an inevitable process: “This steamroller is confidently moving toward January. Significant progress has been made in recent weeks in detailing the proposals.”

Key Elements of the Legislation

The Senate Banking Committee is developing a comprehensive approach to regulate the crypto sector. The draft proposes dividing regulatory jurisdiction between the Securities and Exchange Commission and the Commodity Futures Trading Commission. Additionally, it suggests introducing a new term, “auxiliary asset,” to clearly distinguish cryptocurrencies from securities.

The meeting, which lasted approximately an hour and a half, gathered influential players: led by Republican Senator Tim Scott, with the participation of Democrat Mark Warner and representatives of all key industry players. Elizabeth Warren was not present at the meeting.

Central Conflict: Stablecoins and Profits

The most intense discussion revolved around the profitability regime of stablecoins. The banking sector is concerned that insufficient restrictions on interest payments by stablecoin issuers could turn these assets into a year-round competitive mechanism for value preservation and lending, rather than just a means of payment. In their view, this creates unbalanced market incentives.

The crypto industry, on the other hand, views allowing interest payments as healthy competition and fair practice. Cody Carbone, CEO of the Chamber of Digital Commerce, called the meeting productive and noted: “Despite the lack of scheduled hearings this week, the market regulation structure continues to develop.”

Atmosphere of Compromise Amid Tension

When asked about the dynamics of the relationship between cryptocurrency and traditional finance, Calvert replied: “The atmosphere is tense but not hostile. Everyone understands the importance of reaching a compromise.”

The discussions covered the definition of securities and commodities, decentralized finance issues, and the role of intermediaries. Despite differing positions on stablecoins and profits, neither side seeks to block the legislation, which is seen as a positive signal for further regulatory development.

Initial forecasts predicted a vote by the end of the year, but a Senate Banking Committee spokesperson confirmed that the review has been postponed to a new period. Carbone emphasized that, despite the timeframes, the momentum continues steadily toward a consolidated regulatory framework for the cryptocurrency industry.