It suddenly feels like everything’s coming up crypto. Congress returns this week with expectations upended about the viability of digital asset legislation, thanks to a new embrace by key Democrats. The industry is riding high and bulking up its giant campaign war chest. President Joe Biden and former President Donald Trump are engaging with big crypto questions like never before. MM today has news across these fronts, thanks to the relentless reporting of Eleanor Mueller and Jasper Goodman. On the Hill, the Senate faces unexpected pressure to act on legislation that would set up new financial regulations for crypto, after last month’s bipartisan votes on pro-industry policies in both chambers. The House for the first time passed a comprehensive revamp of crypto rules. The Senate sent to Biden a rollback of SEC guidance that critics say discourages banks from holding digital assets. In a previously unreported move, Senate Majority Leader Chuck Schumer has spoken with Senate Agriculture Chair Debbie Stabenow in recent weeks about her bill to overhaul how the SEC and CFTC share oversight of crypto, according to a Senate aide. Senate Agriculture has a role in the debate because it has jurisdiction over the CFTC, which regulates commodities trading. (Schumer was among the Democrats who supported blocking the SEC crypto guidance last month.) Stabenow made a push for bipartisan crypto legislation in 2022 but it stalled after the collapse of FTX. The Michigan Democrat has been quietly reviving the effort and has been briefing stakeholders on the legislation, said another Senate aide and a crypto lobbyist involved in the talks. A Stabenow spokesperson declined to comment. It’s unclear whether any crypto legislation has a real chance to move in the Senate, where the issue has been a much lower priority than in the House. Senate Banking Chair Sherrod Brown and Sen. Elizabeth Warren, who would have a significant impact on anything getting done, are crypto skeptics who talk more about the industry’s risks than its potential innovations. Warren might appear outnumbered in her anti-crypto crusade at the moment, but don't count her out. Still, Sen. Cynthia Lummis, the Wyoming Republican who is the chamber’s most active crypto legislator, said the recent surge in bipartisan support “was a shot in the arm for the Senate to get with the program.” The attempted revival of Stabenow's bill has spurred private discussions among pro-crypto senators about combining her plan with other digital asset proposals floating around, including stablecoin legislation being negotiated in the House, the second aide said. In other Hill crypto moves, House Financial Services is floating new bills that would require regulators to study tokenization, which will be the focus of a hearing Wednesday. (Also, check out Sen. Ted Cruz’s new bitcoin mining rig.) On the campaign finance front, the industry’s super PAC network has big news this morning: Coinbase, the largest U.S. crypto exchange, is contributing another $25 million. The group’s total fundraising this cycle has now breached $160 million, following two other $25 million top-ups over the past week from Ripple Labs and Andreessen Horowitz. “Crypto voters won't be taken seriously until we send a clear message to political candidates that it is bad politics to be anti-crypto,” Coinbase CEO Brian Armstrong said in a blog post announcing his company’s contribution. The group’s super PACs — Fairshake, Protect Progress and Defend American Jobs — have already succeeded in boosting pro-crypto candidates. They’re threatening to spend in Ohio and Montana races that may determine control of the Senate. Defend American Jobs, which focuses on Republicans, has been active in recent weeks. It has spent at least $509,000 backing Montana congressional hopeful Troy Downing, who serves as the state auditor and has touted crypto-friendly policies. The PAC has also spent at least $1.5 million boosting John Curtis, a pro-crypto Utah representative who is running for Senate. It spent more than $725,000 on Texas Republican Craig Goldman,who won his GOP primary for a House seat last week. Protect Progress, which targets Democrats, has begun spending to boost a pair of pro-crypto House hopefuls in Virginia. In the race for the White House, Biden’s making the crypto world grumpy even as his administration and campaign show some signs of thawing from a skeptical stance. It’s a messier vibe than Trump, who’s been ramping up his explicit courting of crypto voters. In a potential shift, economic policy staffers on the Biden campaign in recent weeks have begun reaching out to some Democratic allies in the crypto industry to discuss digital asset policy, according to two crypto industry sources with direct knowledge of the discussions. The Block first reported the outreach. Biden on Friday underscored tensions brewing among Democrats when he vetoed the bipartisan rollback of SEC crypto guidance. In a statement, he warned against measures that “jeopardize the well-being of consumers and investors” but he left the door open a bit. “My administration is eager to work with Congress to ensure a comprehensive and balanced regulatory framework for digital assets, building on existing authorities, which will promote the responsible development of digital assets and payment innovation and help reinforce United States leadership in the global financial system,” he said. Thank you — I’m stepping away from daily MM duties to focus on other journalistic endeavors at POLITICO and to — seriously — spend more time with my family. Thanks to everyone who read the newsletter and helped make it better over the last year and a half. Whether you like it or not, I’ll still appear here from time to time. I'll continue to edit and report on financial services and the economy. Please stay in touch at zwarmbrodt@politico.com and keep sending tips to Sam Sutton at ssutton@politico.com.
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