Senate Control and Digital Assets

A U.S. Senate flip from Democrat to Republican-controlled would be beneficial for digital assets, according to Republican Sen. Cynthia Lummis in a CNBC interview.

The Senate Banking Committee, influential for digital assets, is currently chaired by Sen. Sherrod Brown (D-Ohio), who has criticized crypto for lacking common-sense protections like ‘know your customer’ rules to prevent illicit finance.

If the Senate flips, Sen. Tim Scott of South Carolina, the committee’s top Republican, would likely be chair. Scott is supportive of crypto and has proposed creating a subcommittee focused on digital assets.

Lummis stated, “I think what’s going to be better for digital assets is if the Senate is Republican… Tim Scott will chair the banking committee, and he’s much more interested in seeing a statutory framework for digital assets than is Sherrod Brown.”

Forecasts suggest Republicans have a 67% chance of taking the Senate, while the House remains uncertain. Bipartisan efforts are underway to regulate digital assets, covering stablecoins and market structure.

Some lawmakers criticize U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler for unclear crypto regulations, while others defend the SEC’s role in protecting investors. The SEC is currently pursuing enforcement actions against firms like Binance, Coinbase, and Kraken.

Lummis argues that Congress needs to regulate crypto. “The SEC has said we have all the tools we need to regulate it, but the way they’ve applied them has brought about court cases,” she explained. “Instead of clear rules for the industry, they’re regulating by enforcement action.”