Tensions on Capitol Hill over President Donald Trump's various cryptocurrency ventures escalated on Tuesday and threatened to derail the digital asset sector's hope of legislation by the end of this year as a top Democratic lawmaker stalled efforts to debate a bill.
Although Congress had appeared likely earlier this year to pass legislation governing digital assets for the first time, Democrats have grown increasingly frustrated as Republican Trump and his family members have promoted their personal crypto projects.
Representative Maxine Waters' objection to a joint hearing scheduled for Tuesday effectively cancelled proceedings between the House Financial Services Committee and the House Agriculture Committee, which were due to discuss creating a new legal regime for cryptocurrencies.
Trump's crypto ventures include a so-called meme coin called $Trump, launched in January, and a business called World Liberty Financial, a crypto company owned partly by the president. Trump on social media has promoted a private dinner later this month for the top holders of his meme coin, along with a "special VIP tour" for a select few investors.
The business endeavors have drawn criticism from government ethics experts and political opponents over potential conflicts of interest, especially because Trump courted cash from the crypto industry on the campaign trail and pledged to overhaul regulations for the sector.
They have also put further legislation this year related to cryptocurrency in doubt as some lawmakers have expressed concern about self-dealing.
"I cannot in good faith agree to such a hearing to discuss crypto market structure while Republicans refuse to stop or even acknowledge Trump's abuse of power," Waters said in a statement ahead of the scheduled hearing.
Representative French Hill, the Republican chairman of the House Financial Services Committee, said that Waters objecting to Tuesday's hearing "has thrown partisanship into what has historically been a strong, good, working bipartisan relationship."
In a statement, Anna Kelly, the White House deputy press secretary, said there were no conflicts of interest and that Trump's assets are in a trust managed by his children.
“President Trump is dedicated to making America the crypto capital of the world and revolutionizing our digital financial technology," she said.
Still, Trump's crypto arrangements have threatened to derail legislation that was once considered near certain by analysts and lobbyists to pass this year. Congress is also debating a bill to create a regulatory framework for stablecoins, a type of cryptocurrency designed to maintain a constant value, usually a 1:1 dollar peg.
Senate Democrats have expressed concerns about the bill, especially after World Liberty Financial announced last week that its stablecoin would be used by an Abu Dhabi investment firm for its $2 billion investment in crypto exchange Binance.
The White House wants that bill to pass the Senate by next week, according to a source familiar with the discussions. But some Democrats said on Saturday that Republicans had failed to negotiate on stronger provisions related to foreign stablecoin issues and anti-money-laundering protections, and that they would be unable to support the bill as it currently stands.
The stablecoin bill could still pass the Senate, in which Republicans hold the majority, but could pose a setback for the crypto industry which has tried to portray digital asset regulation as a bipartisan issue.
