This is what's (currently) in the way of U.S. crypto market structure bill harmony

Republicans have agreed to dozens of Democrat requests in the months-long debate over the form of a U.S. bill that will establish regulations for crypto markets. But some of the biggest items remain unresolved as the timeline squeezes into a matter of days before a potential consequential Senate vote.

Senator Tim Scott, the chairman of the Senate Banking Committee, argued lawmakers can't wait any longer to move forward on crypto market structure legislation. He said a January 15 markup hearing is coming, and the other necessary markup from the Senate Agriculture Committee reportedly may happen on the same day.

However, some half-dozen items remain unresolved on the discussion list, according to a negotiation document that emerged after a meeting of senators on Tuesday. Lobbyists following the latest talks shared some thoughts on how much weight these issues might carry in whatever vote ends up happening next week.

Those points are largely the same that Democrats have been raising for months, including:

• Ethics: A demand for language that bans senior government officials from pulling personal profits from crypto activity, as witnessed with President Donald Trump and his family. But Republican negotiator Senator Cynthia Lummis said she took a compromise provision to the White House and was rebuffed. Trump administration officials have routinely said that his family's participation in digital assets businesses doesn't represent an inappropriate conflict of interests. The take from crypto lobbyists: Republicans will never agree to go after the leader of their party.
• DeFi: Oversight for decentralized finance (DeFi) that's on par with federally regulated financial firms — this is an area that some negotiation has addressed, but its fundamental definitions and questions remain unanswered. The take from lobbyists: If it goes awry, this is the thing that makes the crypto industry turn against its own bill.
• Yield: The Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act said stablecoin issuers can't offer interest, but the read of the new law suggests that affiliates are okay to offer yield and customer-rewards programs. The crypto industry is moving forward on doing so, with the hope that some kind of return for stablecoin holders will incentivize users. The banking industry has said this could strangle its deposit-taking core and threaten the whole business model of U.S. banks, and some Democrats have been moved by that argument and want to limit crypto yield. But White House crypto adviser Patrick Witt argued Wednesday on X that withholding support over this "preserves the status quo which you allege is intolerable."The take from lobbyists: Coinbase Chief Policy Officer Faryar Shirzad said in a social-media post on Wednesday that "Congress already settled this in GENIUS — reopening it now only creates uncertainty and risks the future of the US Dollar as commerce moves onchain."
• CFTC: The Commodity Futures Trading Commission that would be elevated to a leading role in U.S. crypto regulation in the legislation should have a full slate of commissioners — including the two slots for Democrat appointees. Same for the Securities and Exchange Commission. Trump has signaled that he's not keen on disrupting his campaign to rid regulatory agencies of Democrats, but he didn't entirely say no.The take from lobbyists: If existing law already lays out how commissions need to be staffed, how is this a legislative discussion?

Lawmakers are also still discussing significant points on defining how crypto assets are designated and under which jurisdiction they fall, most notably the SEC or CFTC. And they're still hashing out details on the industry's demand that the bill protects software developers from legal pursuit if their products are used illicitly.

Where are the Democrats?

So far, a relative silence from Democrats after this week's meeting leaves their intentions unclear regarding next week's markups. At this tempo, which allows only a couple of days before the committees need to post legislation to get it marked up next week, it's unlikely they'll have a chance to get all of their concerns answered. There's no mystery about the crypto sentiment from the Banking Committee's ranking Democrat, Senator Elizabeth Warren, and some of her close allies who contend digital assets are a danger to consumers and a boon to criminals. But several Democrats have stood apart from this view and engaged in the lengthy negotiation.

Crypto lobbyists such as Digital Chamber CEO Cody Carbone have said they hope some of those can find a way forward next week and vote with Republicans to advance the legislation through the committees. With two committee approvals, a combined bill could then stand for consideration by the rest of the Senate.

"There are outstanding sticking points, but that shouldn't slow down the process," Carbone said in an interview with CoinDesk.

In recent tests — including last year's approval of the GENIUS Act — crypto legislation has drawn wide bipartisan support in voting. The House of Representatives' own Digital Asset Market Clarity Act — the House's match for the bill currently being devised in the Senate, won that chamber in a 294-134 vote.

But crypto lobbyists are quietly concerned that racing ahead on a markup without Democrat buy-in could be damaging for their long-term goal of a bipartisan product. In the 100-member Senate, several Democrats will be required to lift the bill over its usual 60-vote requirement for passage — and that's especially true if Republicans aren't united on the bill.