Senator John Kennedy Warns Republicans Are Not Ready to Pass Federal Crypto Legislation

Senator John Kennedy has openly stated that Republicans are not yet prepared to pass federal cryptocurrency legislation. This admission highlights internal divisions within the party that are slowing down legislative progress and prolonging regulatory uncertainty for the U.S. crypto industry. The lack of consensus revolves around competing priorities and unresolved questions regarding oversight, taxation, and the role of digital assets.

Internal GOP divide and Core Disagreements

The Republican Party remains split between members who prioritize innovation and those who advocate for stricter controls to prevent systemic risks. This division has stalled efforts to create a unified federal framework. Key sticking points include how to tax digital assets and which regulatory body—the SEC or CFTC—should have primary oversight. Without agreement on these issues, progress remains limited.

Central Bank Digital Currencies and Surveillance Concerns

Concerns about central bank digital currencies (CBDCs) have further complicated the debate. Some lawmakers worry that CBDCs could enable greater financial surveillance or centralized control over monetary policy. These fears resonate strongly among proponents of financial sovereignty, making it difficult to draft legislation that satisfies all factions.

Lobbying, Banking Pressure and State-Level Consequences

Lobbying efforts from both the crypto industry and traditional banking sectors have turned legislative discussions into a clash of interests rather than a constructive dialogue. Banks warn about deposit flight to digital assets, while crypto advocates push for clearer rules. In the absence of federal action, states are creating their own regulations—leading to a fragmented legal landscape that could drive businesses and talent to more predictable jurisdictions.