If crypto goes back to the congressional drawing board, 3 Democrat women loom large

Next January, there's a strong chance that U.S. Representative Maxine Waters will steer the destiny of legislation to establish crypto market rules.

The California Democrat stands in line to return to the helm of the House Financial Services Committee, just as a number of other senior Democrats await their potential committee gavels if their party manages to secure majorities in the U.S. House of Representatives or Senate. If Waters takes over her panel, counterpart Representative Shontel Brown could rise to the top of the House Agriculture Committee, the other committee that would likely be in a position to pursue crypto legislation.

If the crypto industry and its congressional allies have to toss the Digital Asset Market Clarity Act in the same bin where they once left its predecessor, the Financial Innovation and Technology for the 21st Century Act (FIT21), potential Democrat committee leaders are unlikely to see crypto regulation occupy the level of priority the current Republicans maintain.

"Regardless of how you feel about crypto, we can't just ignore it," said Blockchain Association CEO Summer Mersinger in a CoinDesk interview. "It's here, and the best thing that we can do is create a federally federal regulatory structure for it. It's hard to argue against that, regardless of whether you like crypto or not."

The betting on Kalshi predicts a Democratic House majority at an 84% likelihood, though that chance is much less (a 47% coin toss) for the Senate, where Democrats face a tougher election battlefield this year. But if they prevail, a Democratic Senate could mean Senator Elizabeth Warren — the bane of crypto lobbyists — ascends to lead the key Senate Banking Committee.

President Donald Trump has made it a special goal to welcome crypto into the U.S. financial regulation tent, with a major win on stablecoins and a contentious fight on market structure. But many of his Democratic political foes have spent considerable time focusing on severing Trump's own crypto business ties. They'll almost certainly pursue congressional investigations of his digital assets activity if they're running the agenda.

Waters has been among the critics of Trump's motives. However, the California lawmaker also had once negotiated an earlier stablecoin effort just inches from the finish line in 2022 — a predecessor to last year's successful Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS) Act. While she's shown a past willingness to take crypto seriously as a topic of legislation, she has been aggressively critical of the Clarity Act (which is facing a narrowing chance for a vote in the Senate).

She called it the "Calamity Act," saying it would "create giant loopholes in our federal financial laws that would put consumers and investors at risk," and it would handcuff the regulators policing the sector. Waters also staged a walk-out of a Clarity hearing in her committee.

She also recently opposed crypto in people's retirement accounts and, last year, pushed one of several bills targeting Trump's crypto empire.

If Waters focused on countering Trump's crypto activity in a return as chairwoman, even a legislative win probably wouldn't negate the president's potential conflicts of interest, because he'd be in a position to veto it. Her office didn’t respond to a request for comment on her plans.

The House and Senate each have a pair of committees that are most centrally engaged on crypto policy, thanks to the U.S.'s unusual split of regulation between separate agencies that concentrate on securities (the Securities and Exchange Commission) and derivatives (the Commodity Futures Trading Commission). So, the agriculture committees in both chambers oversee the CFTC, and the SEC is under the jurisdiction of the Senate Banking committee and House Financial Services Committee.

Shontel Brown is a strong possibility to lead the House Agriculture Committee if Democrats secure the majority, and that's another potential problem for crypto. The Ohio Democrat has opposed all digital assets bills in the past, up to the Clarity Act, earning an "F" grade from crypto advocacy group Stand With Crypto. However, she said she could get behind crypto policy that "protects consumers and allows innovation to benefit everyone."