Senate battles crypto regulation as 'Crypto Week' approaches

(The Center Square) - Senators clashed in a U.S. Senate Banking Committee hearing Wednesday over regulations on cryptocurrency as the House of Representatives prepares to vote on legislation regulating the digital asset next week.

U.S. Rep. French Hill, R-Ark., introduced the Digital Asset Market Clarity Act of 2025 in May, which would give the Commodity Futures Trading Commission oversight authority for cryptocurrency assets like blockchain and the Securities and Exchange Commission oversight for crypto securities.

The House Financial Services Committee designated the week of July 14 as "Crypto Week" as it is set to discuss the Clarity Act and the Senate's GENIUS Act, which both seek to regulate the crypto industry.

The GENIUS Act, which seeks to tie cryptocurrency tokens to a liquid asset like U.S. dollars, received bipartisan support in the U.S. Senate.

The Wednesday hearing revealed steep divides in attitudes toward the Clarity Act and the future of cryptocurrency regulation.

Sen. Elizabeth Warren, D-Mass., said the Clarity Act's language defining "digital commodities" is too broad and could extend its protections to non-crypto companies.

This could include company stocks or personal "meme coins" as long as they are associated with something that has value outside of the digital asset like a celebrity figure or company.

"Under the House bill, a publicly traded company like Meta or Tesla could simply decide to put its stock on the blockchain and, poof, it would escape all SEC regulation," Warren said.

The senators scrutinized President Donald Trump's personal and family investments in cryptocurrency.

"It's unclear exactly what would be categorized as digital commodities under this definition," said Timothy Massad, a member of the panel and research fellow at Harvard University.

Some Republican senators embraced the bill's language regarding digital commodities and pushed back against SEC regulations of cryptocurrencies.

Sen. Bernie Moreno, R-Ohio, compared regulating individual "meme coins" to regulating baseball cards, based on the association of a known individual to the financial system. He said the SEC should not regulate cryptocurrency because its guidelines are not relevant.

"It seems like [with] the crypto industry, people of a certain generation [are] just afraid of it," Moreno said.

"That fear and lack of knowledge and having the humility to know that you just don't know the technological issues here has made this industry just reticent on understanding that this is a whole new world," Moreno added.

Sen. John Kennedy, R-La., admitted he is afraid Congress will not make the right decisions to regulate digital assets.

"I'm really worried we're going to get this wrong," Kennedy said. "We in Congress and our staff don't know as much as the professionals in digital assets know and I don't see how we can possibly catch up," he added.

Brad Garlinghouse, a member of the panel and CEO of the crypto firm Ripple, pushed for Congress to create a regulatory framework for the digital asset market.

"I urge you to prioritize the passage of market structure legislation for digital assets through this committee and the full Senate to provide the rules and regulations needed to ensure that the U.S. becomes the crypto capital of the world," Garlinghouse said.

Ripple, a fintech company that utilizes the XRP Ledger and XRP cryptocurrency to improve international payments, announced a partnership with the Bank of New York Mellon, the oldest bank in the United States, to make it a primary custodian of the company's cryptocurrency.

In written testimony provided before the hearing, Garlinghouse said smart regulations would help the overall economy.

"From the start, Ripple made the deliberate choice to work with policymakers and regulators - not around them. We take a compliance-first approach, operating with over 60 payment service, crypto and money transmitter licenses domestically and globally," he said. "With regard to the topic of this hearing, we believe smart legislation should be based on several core principles: consumers need protection from fraud and scams, markets need proper oversight, bad actors need to be kept in check, and innovation must thrive. A constructive and workable framework for digital assets and stablecoins that achieves these goals will expand access to financial markets, create jobs, boost the economy - and put the U.S. on the path to being a global blockchain and crypto leader."

U.S. Sen. Tim Scott, R-S.C., said protections should be put in place.

"The main thing is safeguarding investors, protecting the marketplace and protecting our nation's security," Scott said.

"I hope that as we move forward on market structure this is just a first step guiding principle," Scott added.