The US crypto framework bill stalls as the Democratic proposal sparks strong industry opposition

ChainCatcher news, according to Cointelegraph, discussions in the U.S. Senate Banking Committee regarding the Responsible Financial Innovation Act (RFIA) have stalled.

Last week, Democratic lawmakers submitted a counterproposal that includes strict restrictions on decentralized finance (DeFi) protocols, especially a "restricted list" mechanism regulated by the U.S. Treasury Department to flag "high-risk" DeFi protocols. The blockchain industry has reacted strongly to this; Blockchain Association CEO Summer Mersinger warned that the proposal would "effectively ban the development of decentralized finance, wallet development, and other decentralized applications in the United States," pushing innovation overseas. Jake Chervinsky, Chief Legal Officer of investment fund Variant, was even more blunt, calling the Democratic proposal "not serious" and essentially "an unprecedented and unconstitutional government takeover of the entire industry."

Currently, Republicans and Democrats are blaming each other for the amendments to the bill, and negotiations have been suspended. Banking Committee Chairman Tim Scott's original deadline to pass the bill by the end of September has already passed, and the growing divide between the two parties has made the prospects for this milestone legislation even more uncertain.