U.S. Treasury Secretary Scott Bessent issued a warning to cryptocurrency insiders negotiating the Digital Asset Market Structure Act in the Senate, briefly echoing the frustration expressed by Democratic Senator Mark Warner during a hearing on Thursday.
“There seems to be a nihilistic group in the industry that would rather have no regulation than have this very good regulation,” Bessant said in testimony before the Senate Banking Committee.
“Amen, man,” said Virginia Sen. Warner, one of the lead Democratic negotiators on the bill. “So weigh it.”
“I do,” Bessant replied. “Early and often.”
Many crypto industry players, including Coinbase CEO Brian Armstrong, have been critical of provisions in the bill, citing concerns over decentralized finance regulation, stablecoin yield rewards and the way tokens are defined as securities. Armstrong withdrew his support for a version of the legislation that passed the Senate Banking Committee last month, with significant consequences.
Warner told the hearing that further meetings on regulation were expected in the coming days and he suggested Bessant would be invited. Throughout these ongoing negotiations, Warner has been outspoken about the illicit financial threat of cryptocurrencies, dominating much of the discussion in the legislative negotiations.
“I feel like I’m in crypto hell,” Warner said, eliciting some laughter in the hearing room. “We’re doing everything we can.”
He said other technical issues in the bill could be addressed, but suggested that addressing “some of the gaps” related to national security and decentralized finance (DeFi) remain his focus.
“We’re going to deal with yields and rewards; we’re going to deal with a lot of other issues; but these national security concerns around DeFi are real and we don’t need to have a set of rules that leaves a lot of exemptions and, frankly, takes away some of the prosecution rights that exist today,” Warner said.
Without naming any of the resistant cryptocurrency industry representatives, Bessant went on to emphasize the importance of the Senate passing the Digital Asset Market Clarity Act. The bill has struggled to maintain momentum as lobbyists from the cryptocurrency and banking industries clashed over stablecoin yields and lawmakers from all parties were unable to agree on certain other provisions. The Treasury Secretary believes the industry cannot grow in the United States unless the bill is passed.
“It would be impossible to continue without it,” he said. “We have to get this clarification bill across the finish line. Any market player who doesn’t want it should move to El Salvador.”
Bessent said he believed the earlier Genius Act, which regulated U.S. stablecoin issuers, struck a good balance that could eventually be repeated in the Clarification Act.
“It seems like there are people who want to live in the United States, but there are no rules for this important industry, and we have to have safe, sound and sensible practices and oversight from the U.S. government, but also allow the freedom of cryptocurrencies,” Bessant said. He added that as both sides continue to work on the Clarification Act, it could “cross the line this year.”
Read more: Cryptocurrency’s U.S. policy goals may face pushback from Democratic Senator Warner
