Congress
Dems press for changes to crypto bill in counteroffer to GOP
Senate Democrats negotiating a major cryptocurrency bill told key Senate Banking Republicans this week they hope to strengthen prohibitions on stablecoin yield payments and further address concerns about illicit finance, according to a summary of a counteroffer obtained by Blue Light News.
The document, which summarizes requests that Democrats sent to Senate Banking GOP negotiators on Monday, came after Republicans sent an initial offer late last week for a compromise market structure bill, titled the Responsible Financial Innovation Act.
“We have accepted significant portions of RFIA – including meaningful concessions on major elements like token classification – in an effort to meet Republicans where they are,” the summary of the Democratic counteroffer said. “However, despite these substantial compromises, the offer Republicans sent on December 4th still fails to meet the core principles Democrats released in September.”
The group of Democrats working on the crypto bill “is concerned that payments of interest or yield on stablecoin balances could pull deposits from the banking system, especially from community banks that play a pivotal role in supporting underserved communities and operate under Community Reinvestment Act obligations,” the document said. “Yield also incentivizes risky behavior and could threaten the financial system if a stablecoin were to lose its value.”
The document also said the working group is “committed to ensuring full slates of commissioners at the” agencies that will be tasked with overseeing digital assets under the bill, the Commodity Futures Trading Commission and the Securities and Exchange Commission.
It also said Democrats are pressing for “limits on elected officials and their families from issuing, endorsing, or profiting from digital assets while in office.” It additionally included an array of illicit finance provisions and token classification provisions that Democrats are seeking to include in the measure.
Banking Chair Tim Scott (R-S.C.) is pressing to hold a markup before lawmakers leave for the holiday break at the end of next week, but Democrats are pushing back, casting uncertainty over the timeline for the effort. Crypto-friendly Democrats exited a closed-door meeting Wednesday morning pessimistic about the possibility of a committee vote next week.
“We’re not ready for it,” said Sen. Catherine Cortez Masto, a centrist Nevada Democrat who sits on the Banking panel. “We’ve still got to work through illicit activity, money laundering issues that need to be addressed.”
Sen. Mark Warner (D-Va.), a senior Banking Committee member, said “we have wide swaths where we don’t have agreement — even any language.”
A spokesperson for Scott said in a statement that “Republicans on the Senate Banking Committee have spent months negotiating in good faith, circulating multiple rounds of bipartisan text, soliciting extensive stakeholder feedback, and feedback from their Democratic colleagues.”
“Chairman Scott remains committed to a bipartisan path forward, but progress requires coming to a compromise on legislative text, not press statements or shifting objections,” said the spokesperson, Jeff Naft.
The comments come amid a flurry of crypto activity on Capitol Hill. Sen. Ruben Gallego met Wednesday with White House crypto adviser Patrick Witt, along with staff from the Treasury Department.
Lawmakers involved in the talks are discussing a potential bipartisan member-level meeting on Thursday, according to two people with knowledge of the matter who were granted anonymity to discuss closed-door negotiations. Democrats are also set to meet separately with big bank CEOs on Thursday about the crypto bill.
President Donald Trump and Speaker Mike Johnson will meet at the White House Tuesday with the executives of top artificial intelligence companies, according to two people granted anonymity to discuss private plans.
The meeting comes as Congress is coming under increasing pressure to put federal guardrails on AI development, as fears mount that technological advancements could soon spiral beyond human control.
Responding to some warnings that AI development was on track to cause human extinction by the end of the decade, Johnson has said he wants Trump and AI CEOs to “go in a big room, close the door and sort this out.” He has yet to endorse major legislative action to address the issue, as Trump has resisted calls for government regulations, citing concerns about lagging behind China.
The president and speaker were in attendance at the State Dinner on Thursday night in honor of Chinese President Xi Jinping’s visit to Washington, as were OpenAI CEO Sam Altman, Nvidia CEO Jensen Huang, Meta CEO Mark Zuckerberg and Google CEO Sundar Pichai. It was not immediately clear which of these executives would be invited to next week’s meeting, and who will be participating.
News that the meeting had been scheduled was first reported by Axios.
A group of 10 Democrats has signed on to Rep. Greg Casar’s (D-Texas) bill that would ban superintelligence and pause advanced AI development until a vetting regime could be stood up.
Reps. Alexandria Ocasio Cortez (D-N.Y.) and Ro Khanna (D-Calif.), both of whom are mulling a 2028 presidential run, are cosponsoring the bill, named the Ban Artificial Superintelligence Act.
Khanna, in a statement, noted that he convened a hearing this week on AI safety cooperation between the U.S. and China as ranking member of the House China Select Committee with AI experts who underscored the need for a verifiable pause on superintelligence.
AI superintelligence is an as-yet hypothetical form of the advanced technology that surpasses humans’ cognitive capabilities, but exactly when AI crosses the threshold into superintelligence remains contested. The bill would subject violators to a 20-year prison sentence.
The support from prominent progressives in the Democratic caucus comes as the party is navigating how they would approach AI regulation should they retake control of one or both chambers in November.
Other cosponsors include Reps. Analilia Mejia of New Jersey, Yassamin Ansari and Adelita Grijalva of Arizona, Val Hoyle of Oregon, Stephen Lynch of Massachusetts, Chuy García of Illinois, Chris Deluzio of Pennsylvania and Nydia Velázquez of New York.
“We absolutely have to slow down and regulate the advancement of dangerous AI technologies that have the potential to spiral out-of-control and threaten humanity,” Ansari said.
To Lynch, a string of recent AI-led cyberbreaches has “shown us that the advanced forms of this are out of control,” he said in an interview. “We haven’t really solved that control problem yet, nor have we got the alignment problem right yet.”
Casar’s bill, introduced this week with Sen. Bernie Sanders (I-Vt.), is among the most stringent AI regulations proposed by either party.
Rather than focusing on bans as Casar and his progressive allies have done, centrist Democrats are looking to legislative proposals they say can address the technology’s risks without stifling innovation.
Senate Republicans are discussing whether to call up a data center utility costs bill as they make plans to stay in Washington next week rather than beat an early exit before the midterms.
Two GOP aides who spoke on the condition of anonymity said the Senate will remain in town amid pressure from some corners of the party to send members home early to campaign.
Asked if the Senate will stay next week, Majority Leader John Thune said Thursday it’s “looking that way.”
While some lawmakers had hoped to move a long-brewing bipartisan energy permitting deal, those hopes have evaporated, and GOP leaders are instead eyeing votes on the Ratepayer Protection Act — a top priority of endangered Ohio Sen. Jon Husted.
Thune said Thursday moving to the data-center-focused bill next week “is an option.” The Senate is also expected to take up a Democratic resolution condemning the Iran war and several presidential nominations.
The Ratepayer Protection Act easily passed the House earlier this month, but some Senate Democrats are arguing it does not go far enough and party leaders could be motivated to deny Husted a pre-election win.
Josh Siegel contributed to this report.
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