Bipartisan Crypto Bill Nears Vote Amid DeFi Regulation Debate

Coinbase CEO Brian Armstrong has signaled growing optimism that a U.S. crypto market structure bill will pass by year-end, despite a partial government shutdown. In a series of public statements, Armstrong emphasized bipartisan momentum for regulatory clarity, stating that lawmakers from both parties are "90% there" in finalizing the legislation, according to a PYMNTS report. The bill, which aims to establish a clear framework for crypto oversight, has drawn significant industry and political attention as it moves through Congress.

Armstrong highlighted that negotiations between Senate Democrats and Republicans are focused on resolving the remaining 10% of disagreements, particularly around decentralized finance (DeFi) and stablecoin regulations, the PYMNTS report said. He projected confidence that the Senate committee would approve the bill by Thanksgiving, with a full vote likely before December 31, according to Live Bitcoin News. This timeline aligns with broader efforts to address gaps in crypto regulation, including the CLARITY Act—proposed to divide oversight between the SEC and CFTC—and the GENIUS Act, which already passed and legalizes stablecoin rewards, according to Benzinga.

The bipartisan push has not been without friction. While lawmakers like Senate Banking Committee members have expressed cautious optimism, critics such as Sen. Elizabeth Warren (D-Mass.) have raised concerns about potential conflicts of interest, particularly regarding Trump-backed crypto ventures. Additionally, the Senate Democrats' proposed framework has faced pushback from industry groups, with Blockchain Association CEO Summer Mersinger warning that stringent KYC rules and restrictions on DeFi could stifle innovation and drive it overseas, according to Blockchain News.

Market reactions to the legislative developments have been positive. Coinbase shares rose 0.46% in after-hours trading following Armstrong's statements, with the stock up nearly 30% year-to-date. Analysts suggest that regulatory clarity could bolster investor confidence, particularly for centralized exchanges like Coinbase, which has actively engaged with lawmakers to shape the bill's provisions.

White House Crypto and AI Czar David Sacks has echoed Armstrong's optimism, calling the current position "excellent" for bipartisan passage. However, the path forward remains contingent on bridging divides over DeFi's regulatory scope and ensuring stablecoin protections. Armstrong has urged lawmakers to exclude decentralized protocols from the same rules applied to centralized entities, arguing that overregulation could hinder innovation.

As the 2025 legislative session progresses, the outcome of these negotiations will likely define the U.S. crypto industry's regulatory landscape for years to come. With both parties working to finalize details, the focus remains on balancing investor protection with fostering technological advancement in a rapidly evolving market.