A New Crypto Clash Looms For Elizabeth Warren

Democrats are barreling toward a new clash over cryptocurrency policy that could pit a growing cadre of industry-friendly lawmakers in the party against the left’s loudest voice on financial policy: Sen. Elizabeth Warren (D-Mass.).

Pro-crypto lawmakers are moving quickly to advance long-sought legislation that would give new legitimacy to the digital assets sector — part of a Republican-led push to deliver on President Donald Trump’s pledge to turn the United States into the “crypto capital of the planet.” To make it happen, they are scrambling to get enough Democrats on board with industry-backed legislation to clear the Senate.

Some on the left are already signing on, and it’s setting up a potential rift between crypto-friendly Democrats and Warren just months into the Massachusetts lawmaker's tenure as the party’s new leader on the powerful Senate Banking Committee.

“There’s a number of [Democratic] senators who do want to get involved in this space,” said Sen. Kirsten Gillibrand, a pro-crypto New York Democrat who has helped write GOP-led digital assets legislation and is quarterbacking the efforts to get other members of her party on board.

The push comes as part of a broad shift in Washington policymaking toward regulatory changes that could benefit the crypto sector. The industry, long dogged by scandals and concerns about financial fraud, is now being embraced by lawmakers and regulators who are eyeing changes that could help legitimize its $3 trillion market. The turn has been driven in part by a massive political spending spree by top crypto firms and executives, who have dumped hundreds of millions of dollars into influence campaigns designed to take down critics and boost industry allies.

The effort to attract more bipartisan support illustrates how Democrats hold the keys to passing the crypto legislation the GOP has pledged, which will require 60 votes to pass the Senate, where Republicans hold a narrow majority of 53 seats. It could become one of the few spaces for bipartisan dealmaking in a bitterly divided Congress.

Washington’s pro-crypto shift is primarily being driven by Republicans, who have broadly embraced the sector, but a growing number of Democrats appear eager to get on board. The embrace comes despite concerns from skeptics like Warren, who has been a leading critic of the digital assets sector.

“I have a very different experience with crypto and understanding of how it fits into our economy,” Sen. Ruben Gallego (D-Ariz.) said in an interview last month of his differences with Warren.

Gallego voted as a member of the House last year for an industry-backed crypto bill that Warren opposed. He said last month that he is “going to vote to represent what I think Arizona actually thinks about crypto and how it fits into the economy.”

It’s all coming together to present a major early test for how Warren, who has clashed fiercely with moderate Democrats in the past over financial regulation issues, will handle differences with others in her party in her new role as its leader on the committee overseeing Wall Street and crypto. She has warned that digital assets present risks to consumers and called for the industry to be subjected to tougher anti-money laundering standards.

“I believe that Democrats understand the importance of consumer protections and anti-money laundering curbs in any new financial product,” Warren told reporters last week in response to questions for this story. “All we’re looking for is a level playing field between crypto and all of the other financial systems.”

Crypto is used by just a fraction of the U.S. population, but it has come to play an outsize role in American politics. That has been driven in large part by the industry’s political spending. Gallego is one of three Senate Democrats who benefited from spending by a super PAC network funded by crypto firms, which spent more than $10 million to boost his Arizona Senate bid. Now, that PAC group has replenished its war chest with more than $115 million ahead of the 2026 midterms. The money acts as both carrot and stick: It could benefit lawmakers facing competitive re-election campaigns in 2026 who back the industry’s goals — and it threatens those who don’t.

Crypto firms also say their cause is being driven by the grassroots. Estimates of crypto use vary widely: A Federal Reserve study released last year found that only 7 percent of the U.S. population bought or held crypto in 2023, though some subsequent opinion polls have found more widespread usage. Polls show that digital assets are used most by young people, especially men, and people of color — demographics that Democrats have historically performed well with, but Trump courted aggressively during the 2024 campaign, including by embracing crypto.

Regardless, Democrats are eager to get in on the action.

“I’m looking to engage on this topic,” said Sen. Mark Warner (D-Va.), a longtime Senate dealmaker who is a senior member of the Banking Committee.

Warner, a former venture capitalist, has a history of splitting with Warren over financial regulation issues, and he could become a key player in crypto negotiations. He said in an interview he wants “to make sure there’s appropriate safeguards,” adding that the industry’s resilience following the downfall of Sam Bankman-Fried, a crypto executive convicted of fraud who played a major role in influencing previous attempts to legislate crypto regulation, shows "it’s here to stay.”

“Having some kind of regulatory format makes sense,” he said.

Warner is just the latest Democrat to signal crypto curiosity. Other members of the Senate Banking panel — Gallego, Andy Kim of New Jersey and Angela Alsobrooks of Maryland — have also previously taken industry-friendly positions that put them at odds with Warren. And top party leaders including Senate Minority Leader Chuck Schumer of New York and former House Speaker Nancy Pelosi of California have supported pro-crypto proposals in the past.

“It doesn’t mean that we won’t have respectful discussions and sometimes be in opposition, but I don’t think it’s going to be anything that’s going to be contentious in nature at all,” Gallego said.

The issue is poised to come to a head quickly in the coming weeks. Banking Committee Chair Tim Scott (R-S.C.) hopes to mark up GOP-led legislation that would create a regulatory framework for crypto tokens called stablecoins, which are digital currencies that are pegged to other assets like the U.S. dollar, before the Senate’s March recess, according to a spokesperson.

Two Democrats — Gillibrand, who helped draft the bill, and Alsobrooks — are already supporters. Gallego said last week he is looking at the bill.

Warren has signaled some openness to working on stablecoin legislation, but indicated she is opposed to the existing proposal, led by Sen. Bill Hagerty (R-Tenn.).

“Any forward movement in the crypto area needs to have strong consumer protections and guardrails against money laundering,” she told reporters last week. “I’m concerned about the lack in both areas.”

Other Democrats are also pushing back. Rep. Brad Sherman (D-Calif.) said in an interview Tuesday that the “sole purpose” of stablecoins “is to be a mechanism for those who want to avoid the anti-money laundering and know-your-customer laws.”

Warren has also raised concerns that stablecoins present a potential threat to financial stability. She said last week that “banks taking more crypto risk onto their balance sheet presents a real safety and soundness issue that bank regulators need to keep a close watch on.”

Pro-crypto senators are gearing up to do an end-run around her. Gillibrand said last week that “at least seven” Democrats “are reading the bill right now.”

“We’re going to try to get to 60 — meaning we need Democrats,” said Sen. Cynthia Lummis (R-Wyo.), a leading crypto booster who chairs a Senate Banking subcommittee on digital assets. “And I think we can get ’em.”