Sen. Gillibrand ‘optimistic’ Senate Agriculture will advance crypto bill
Sen. Kirsten Gillibrand (DY) is “very optimistic” that the Senate Agriculture Committee’s updated legislation to regulate cryptocurrencies will move forward, even though Republicans have yet to reach an agreement with Democrats.
“Senators have been working pretty intensely on a bipartisan basis for the last six months and we have two different bills,” Gillibrand told CNBC in an exclusive interview.
He said one piece of the legislation is with the Agriculture Committee, which oversees the Commodity Futures Trading Commission, and the second piece is with the Banking Committee, which oversees the Securities and Exchange Commission and banking matters.
“Since these types of digital assets have some of the characteristics of both commodities and securities, you need regulation by both committees,” Gillibrand said.
The Democratic senator is not a member of the Senate Agriculture Committee but has been involved in negotiations on the structure of the crypto market. He explained that two bills addressing different parts of the crypto market structure are being worked on simultaneously.
“I think both senators on the Banking and Agriculture committee are working in a bipartisan manner and in good faith,” he said.
On Wednesday night, the Senate Agriculture Committee announced: updated legislation textBased on a previously published bipartisan debate draft. The bill would give the CFTC new authority to regulate digital assets.
Committee chairman John Boozman, R-Ark., acknowledged in a statement that “differences remain on key policy issues” but that the bill “is based on a bipartisan discussion draft, incorporates input from stakeholders, and represents months of work.”
“While it is unfortunate that we were unable to reach an agreement, I appreciate the collaboration that made this legislation better,” Boozman said, adding that “it is time to sign this bill into law.”
Senate Agriculture Committee plans to consider legislation to regulate digital commodities January 27.
The Senate Banking Committee’s markup hearing on its draft text to regulate digital assets is scheduled for: January 15but was postponed at the last minute following opposition from the crypto industry, including Coinbase.
When asked if the Senate Agriculture Committee hearing was also at risk of delay, Gillibrand told CNBC that there are still areas that need bipartisan decisions, but she believes the increases will happen on Tuesday.
Gillibrand stated that the Senate Agriculture Committee draft is still under review, adding, “I hope that senators will work to make changes on a bipartisan basis to make the draft stronger, to make it better, and to continue negotiations in areas where solutions have not been achieved.”
He said the Agriculture Committee’s earlier draft included many bipartisan compromises, some of which were left out. “My hope is that these senators will go back to the drawing board and try to reintroduce some compromises that I think are very strong,” Gillibrand said.
Senate Banking Committee bill pending
Bipartisan negotiations are ongoing for the Senate Banking Committee’s draft text of crypto market structure legislation, according to Chairman Tim Scott, R.S.C.
“I have spoken with leaders of the crypto industry, the financial industry, and my Democratic and Republican colleagues, and everyone continues to work in good faith at the table,” Scott said in a statement.
A new hearing date on the Senate Banking Committee’s draft crypto market structure bill has not yet been set.
“I think people will continue to work over the next few weeks,” Gillibrand told CNBC, noting that “people want to do it now.”
Speaking to CNBC’s “Squawk Box” at the World Economic Forum’s annual meeting in Davos, Switzerland, on Tuesday, Coinbase CEO Brian Armstrong kept up the pressure on the Senate’s crypto legislative efforts. He said the company’s legal team and executives began noticing “some pretty serious problems in the draft text” of the Senate Banking Committee’s bill, and it didn’t appear there was a plan to fix those problems.
“We felt like we had to go out and advocate for our customers and say, ‘We’ve got some problems here,'” Armstrong said.
In a post on XArmstrong wrote that his version of the bill “would be materially worse than the current status quo.”
Armstrong also outlined some of the problems Coinbase had with the Senate Banking Committee’s draft text; these include “draft amendments that would eliminate rewards in stablecoins and allow banks to ban competition.”
The Senate Banking Committee’s text would ban issuers of stablecoins from offering rewards for holding them. Instead, these rewards must be offered through the completion of a transaction or through a rewards program.
The banking industry is calling on Congress to close what it sees as a loophole in the GENIUS Act stablecoin legislation that prohibits stablecoin issuers from paying interest directly. Banks argue that this will lead to a flight of deposits from the insured banking system. Some crypto companies, especially Coinbase, opposed this claim.
Gillibrand was the lead Democratic senator on the GENIUS Act and helped guide the regulatory framework through Congress. President Donald Trump signed the bill into law in July.
Asked what the banking industry thinks about allegations of loopholes in the GENIUS Act, he said he is “optimistic that we can find common-sense, bipartisan language that will satisfy everyone’s concerns on this issue.”
“I thought we did this in GENIUS, but we will continue to study if further study is needed,” he added. “We used very strong language indicating that we are fine with rewards, points and other programs, but we cannot offer interest-like products on stablecoins,” he said.
Gillibrand said lawmakers want to give the crypto industry an opportunity to show it can follow the rules of the road, adding that lawmakers don’t want to see deposit flights from banks.
“We wanted to make sure that no consumer was confused about what a stablecoin is versus what a dollar sitting in their bank account is because stablecoins are not FDIC insured,” he said, adding that different protections apply to stablecoins.
“We have made sure that every stablecoin is backed by one US dollar or the US dollar equivalent, and that’s why we thought the compromise and the language that we came to in this bill was very strong,” Gillibrand added.
A Republican ally announces retirement
The Democratic senator has been pushing for crypto legislation since 2022, when he and Sen. Cynthia Lummis, R-Wyo., introduced the Lummis-Gillibrand Responsible Financial Innovation Act, a bipartisan framework for cryptocurrency regulation.
“This is a great loss for the U.S. Senate and a personal loss for me,” Gillibrand said of Lummis’ expected retirement.
Despite Lummis’ retirement, Gillibrand said his advocacy for digital assets will not change. He emphasized that he is “committed” to crypto as he sees it as providing opportunities for entrepreneurship and innovation.
“I don’t want China or Asia or other parts of the world to benefit from these industries because we don’t want or can’t regulate it,” Gillibrand said.
“If we want to protect consumers and traditional financial services, the best way to do that is to regulate it. That’s the only thing that makes it possible to be globally competitive,” he added.
Gillibrand emphasized that lawmakers must remain at the negotiating table and continue to work bipartisanly to create a comprehensive regulatory framework for digital assets.
