Tim Scott’s Crypto Balancing Act

The biggest test of Sen. Tim Scott’s legislative career is coming to a head in the final weeks of 2025 as the first-year chair of the Senate Banking Committee races to strike a landmark cryptocurrency deal with Democrats. It could carry outsized consequences for next year’s midterms.

Scott, who also chairs the Senate GOP’s campaign arm, is navigating messy politics and a complex policy debate as he pushes a sweeping crypto market structure bill that would overhaul how digital assets are regulated. The effort has put the affable South Carolina Republican in an unusual bind: courting Democrats as Banking chair while gearing up to defeat them as head of the National Republican Senatorial Committee.

The balancing act is made more complicated by a massive amount of campaign money that's at stake. The crypto sector is poised to dump hundreds of millions of dollars into influencing the 2026 elections, and Scott is tasked with trying to tilt that toward Republicans.

The process surrounding the crypto bill has been chaotic at times. Negotiations between Scott’s team and a bloc of Senate Democrats have spilled into public disputes, and Scott last month accused Democratic negotiators of “stalling” the effort. It’s poised to come to a head as Scott races to deliver on a promise to hold a committee vote on a bill before senators leave for the holiday break at the end of next week.

“It’s tough to build policy in public, and that’s what they’re doing,” said Patrick McHenry, a former House Republican lawmaker who spearheaded the first-ever congressional push to enact new rules for digital assets when he chaired the Financial Services Committee from 2023 to 2025.

The fight highlights the challenge Scott faces as the first Republican in nearly 25 years to simultaneously chair a Senate committee and the NRSC. He needs Democratic cooperation to pass a crypto bill — but also must use that work to fundraise against some of those same lawmakers. Crypto spending is expected to loom large in pivotal Senate races, including the reelections of top GOP targets like Democratic Sens. Jon Ossoff of Georgia and Mark Warner of Virginia, who have both previously backed industry-friendly crypto legislation.

Scott, in an interview last week, credited Republicans with driving industry-friendly crypto policy, saying the GOP majorities in the House and Senate are the reason “that we’re having a crypto conversation at all.” But he said politics and fundraising are not considerations for him as Banking chair.

“What I’m looking for are enough votes to get to ‘yes,’” Scott said. “The truth of the matter is, the less you think about the money, the better off we all are. And I think we do that by focusing on the key components of the legislation that get members on the Banking Committee to a big ‘yes’ sooner rather than later. If you do that with blinders, you do the right thing for the American people.”

Still, Scott’s dual roles have drawn skepticism — including among fellow Republicans in the House, who passed their own crypto market structure bill in July and have grown frustrated with Senate delays. Scott originally promised to advance a market structure bill through his committee in September, then targeted a pre-Thanksgiving markup and is now racing to hold one before the end of the year.

“His political role has caused probably more speedbumps in all of this than anything,” said one GOP member of the House Financial Services Committee who was granted anonymity to speak candidly about sensitive intra-party differences. “I need to work with you, but I’m trying to beat the shit out of you — that just structurally creates problems.”

House Republicans have also questioned Scott’s move to draft a new market structure bill, instead of using their legislation, dubbed the CLARITY Act, as the base text for negotiations. The House measure drew support from 78 Democrats when it passed the chamber in July. House lawmakers at that time also passed into law a narrower crypto bill dealing with so-called stablecoins after President Donald Trump pressed the lower chamber to accept the Senate’s product without changes.

“Any objective view would easily understand how much time and effort the House has put into this over the last number of years,” the House Republican said, calling the current dynamic with the Senate “understandably frustrating.”

House members’ frustration with the Senate is a long-standing tension on Capitol Hill — and it’s been amplified during this Congress. Scott, who has to grapple with a supermajority threshold to pass bills that the House doesn’t have, said in an interview that senators “appreciate the work the House has put in with CLARITY.”

“We looked at CLARITY and celebrated some of the success of CLARITY and embed their philosophy in the market structure that we have,” he said. “I find it to be a strong product. And we are going to make sure that we embed the priorities on both sides of our aisle so that we have a bicameral legislative process that produces a presidential signature at the end.”

The 2026 political dynamics are looming over Scott’s push to hold a markup on the crypto bill before the end of next week. The legislation will need cross-aisle support to pass on the floor, and Scott and his team want to win a bipartisan vote in committee to signal that the push is viable. But if negotiators can’t come to an agreement over the next week, Republicans could benefit politically by forcing a vote and putting Democrats on record opposing a crypto industry-backed bill.

Scott allies say his top priority is delivering a win on crypto policy for Trump. GOP Banking committee members downplay the impact of Scott’s dual roles.

“The chairman of the NRSC and the chairman of the [Democratic Senatorial Campaign Committee] are senators — every time, every cycle,” said Sen. Kevin Cramer (R-N.D.). “There’s probably always some potential perceived challenge to that. But we’re all adults. Tim’s just one of the nicest people in the Senate. So I don’t think that’s a problem. It certainly hasn’t been to this point.”

Scott isn’t alone in navigating the political tensions: Sen. Kirsten Gillibrand of New York, a lead Democratic negotiator and longtime partner with Republicans on industry-backed legislation, is chairing her caucus’s campaign arm for the 2026 cycle. She faces a similar balancing act, though she lacks Scott’s gavel and the ability to force a vote.

“Sen. Scott and Sen. Gillibrand are in counterbalancing positions,” said Sen. Cynthia Lummis (R-Wyo.), the crypto industry’s most fervent ally in the Senate who chairs a Senate Banking subcommittee on crypto. “I think that considering their dual challenges, they’re doing a very good job.”

It’s also familiar territory for Scott. When he ran for president in 2024 while serving as Senate Banking’s ranking member, he was both vying to lead the GOP and partnering on legislation with one of the party’s top electoral targets — former Sen. Sherrod Brown of Ohio, who chaired the committee at the time.

Asked about wearing both hats, Scott said “it’s been pretty easy, from my perspective, to keep the main thing the main thing.”

“That’s why I’m able to work with Kirsten Gillibrand,” he said. “She and I have been working together for months on this legislation because at the end of the day, our job — my job — is very simple: it’s to make Americans better. And as long as I keep that as the main thing, it’s an easy job for me to tackle.”

Beyond just crypto, Scott has steered the Banking Committee through its busiest stretch in years, bucking its reputation as a powerful but dormant panel. The stablecoin bill became law in July, and Scott partnered with ranking member Elizabeth Warren (D-Mass.) on a housing bill that cleared the committee unanimously and later passed the full Senate as part of a must-pass defense bill.

But the market structure effort is by far Scott’s most ambitious legislative undertaking. The bill would overhaul complicated securities and commodities laws, and it spans the jurisdictions of both the Senate Banking and Agriculture committees. Talks over the measure have been complicated by an intense lobbying battle between the competing interests of banks and crypto firms, 2026 election politics and the bitter partisan divides of the Trump era that have stymied most bipartisan dealmaking. Scott’s first year as chair has also seen staff turnover, including the departures of his first two staff directors.

“Any time you’re doing something that’s never been done in the history of the country, it might be kind of challenging to get everybody on the same page,” Scott said.

He added that the process has “been pain-free — not frustration-free — but pain-free because the benefits are so much bigger than the process.” Asked about the staff churn, Scott said he is “really proud that I hire promotable people,” noting that many of his former aides have departed for high-level jobs with congressional leaders or in the Trump administration.

Despite uncertainty about how the year-end scramble will play out, many in the crypto world are optimistic about the long-term prospects for a market structure bill. McHenry, the former House Financial Services chair who now advises several crypto-related firms, said the Senate Banking “committee process is one fraught with peril for all sides.”

“But once it gets through that process, the sunny day is coming to the Senate floor, because there is wider support on the Senate floor than in committee,” he said. “Messy now leads to a better vote on the Senate floor.”