The Democrats’ crypto dam finally broke. Now what?

It started slowly, with a few stubborn Democrats in Congress refusing to toe the partisan line set by party leaders. Last month, those trickles of resistance turned into a trickle and then a river, as more of their colleagues, including powerful Senate Majority Leader Chuck Schumer (D-Y), joined them in voting in favor of crypto legislation. The dam finally broke on Wednesday, when 71 Democrats joined 208 Republicans in the House of Representatives to pass another pro-crypto bill (this one clarifying the regulatory authority of the SEC and CFTC) and eliminating the ideological hard line imposed by the progressive wing. Party.

Crypto Twitter, never subtle at the best of times, has cast this week’s bipartisan show of support for crypto as a glorious national achievement on par with civil rights legislation or the founding of the republic. The cheerful rhetoric was excessive but understandable. Hopes of crypto reform were all but dead in Washington DC earlier this year, and it looked like the industry’s nemesis, SEC Chairman Gary Gensler, would have the last laugh. But thanks in part to a shrewd national PR campaign led by former Schumer aide Josh Vlasto, many Democrats have woken up to the obvious fact that a significant portion of people under 50 care about crypto, and the ground has begun to shift.

The final straw for senior Democrats could be when former President Donald Trump, once a foe of Bitcoin, embraces the industry and positions himself to unload tens or potentially hundreds of millions of crypto dollars. There is speculation that someone in the White House has finally concluded that campaign contributions and electoral politics trump progressive pearl-clutching when it comes to crypto.

The question is what happens now? While the crypto industry won a major symbolic victory this week, the bills it passed have yet to cross the finish line. The first proposal that would allow banks to hold crypto has passed both houses of Congress but still faces the threat of a veto from President Joe Biden (though that’s looking less likely by the day). The other, related to the regulatory authority of the SEC and CFTC, still needs to pass the Senate, where crypto rival Sen. May be pushed by Sherrod Brown (R-Ohio).

Even if the bills become law, they are incremental measures and will not help the crypto industry in court, where Gensler has his foot on the throat of leading companies, including Coinbase. Meanwhile, the SEC chairman can continue to cause mischief on the regulatory front by labeling anything he sees as a security under his authority. While the industry appeared to be on a hiatus when another anti-crypto regulator, FDIC Chairman Martin Gruenberg, said he would resign over a sexual harassment scandal, there are every signs he will make time to do so.

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As a result, the crypto industry had its best week ever in Washington DC. However, there is still an uphill struggle to carve out a secure place for oneself in the US economy. As Churchill once said, “This is not even the beginning of the end. But perhaps it is the end of the beginning.”

Jeff John Roberts
[email protected]
@jeffjohnroberts

This story first appeared on Fortune.com