Crypto Framework on Hold Amid Partisan Gridlock
Senate Democrats introduced a counterproposal to the crypto framework bill, sparking concern among industry advocates that progress toward clear blockchain regulation will stall. The proposal, not yet public, reportedly imposes strict rules on decentralized finance (DeFi) protocols, including a "restricted list" for protocols deemed too risky. Critics argue these measures give excessive government authority, narrowly define decentralization, and treat DeFi front ends as financial intermediaries, potentially stifling innovation and pushing development offshore. Negotiations between Senate Democrats and Republicans have stopped, halting progress on the Responsible Financial Innovation Act (RFIA). Partisan clashes have intensified, with both sides blaming each other for the legislative deadlock. Without agreement on a markup date, further committee meetings are paused. While the Senate Agriculture Committee continues discussions on commodities aspects of the bill, no significant progress is reported. Industry leaders criticize the Democrats’ approach as heavy-handed and believe it could effectively ban DeFi in the U.S. The future of the crypto framework bill is increasingly uncertain amid rising partisan tensions and regulatory skepticism.
