Senate prepares to move on crypto while government shutdown threat looms

Author:

The Carta Policy Team

Published date:

27 January 2026

Senate Ag advances crypto market structure bill without bipartisan support, Trump makes affordability pitch at Davos, California launches VC diversity site, and AI risks spark urgent calls for federal action.

Topline

• Senate Ag moves forward with crypto market structure markup
• Trump highlights affordability agenda at Davos
• CA launches VC diversity reporting website
• AI’s wake-up call to Congress
• Quick hits

Senate Ag moves forward with crypto market structure markup

The Senate Agriculture Committee is moving forward with an updated crypto market structure framework despite the absence of bipartisan support. The latest version, which largely reflects the House-passed CLARITY provisions, focuses on digital commodity intermediaries and expands the CFTC’s authority to regulate crypto spot markets. Despite months of bipartisan negotiations, key policy differences remain unresolved:

• Ethics: A central sticking point for Democrats is the absence of language restricting public officials and their families from endorsing, issuing, or profiting from digital assets while in office.
• Consumer protection: Democrats argue that the bill provides inadequate protection for retail customers on DeFi platforms and whether these platforms should face traditional financial regulatory requirements.
• Quorum requirements: Democrats sought binding requirements to ensure the CFTC and SEC maintain bipartisan commissions, while the bill’s non-binding guidance language appears insufficient to address their concerns.
• AML and illicit finance: Democrats pushed for stronger anti-money laundering provisions to close perceived loopholes related to self-custody, intermediaries, and decentralized platforms.

Why it matters: The decision to move forward without Democratic support marks a shift from earlier bipartisan efforts and complicates Senate passage, which will require a bipartisan vote. While industry reaction has been positive, this version does not fully resolve the long-running debates over asset classification, stablecoin rewards, and DeFi regulation that stalled Senate Banking Committee efforts to advance its version earlier this month.

Trump highlights affordability agenda at Davos

At the World Economic Forum in Davos, President Donald Trump made housing affordability a centerpiece of his address, highlighting domestic cost-of-living concerns against a backdrop of geopolitical tensions and tariff threats tied to Trump’s territorial ambitions for Greenland. Trump framed his housing proposals as part of a broader economic agenda ahead of the 2026 midterms, using the global stage to emphasize pocketbook issues that resonate with American voters. Key affordability proposals from Davos:

• Protecting the housing supply from Wall Street: Trump highlighted a new executive order aimed at limiting the ability for large institutional investors (i.e., private equity) to purchase single-family homes, arguing it would help first-time buyers compete in tight markets.
• Lowering mortgage costs: Trump outlined plans for the federal government to purchase up to $200B in mortgage-backed securities to drive down mortgage rates, while continuing to pressure the Federal Reserve for broader interest rate cuts.
• Broader affordability push: Trump also called on Congress to cap credit card interest rates at 10% for one year to make it easier for Americans to save for home purchases.

Why it matters: Elevating housing affordability at Davos reflects Trump’s turn toward economic populism as a midterm strategy, a stance that ironically aligns more closely with progressive policy aims to promote affordability over Wall Street interests. The broader response among policymakers has been more skeptical.

CA launches VC diversity reporting website

In anticipation of the 2026 VC diversity reporting mandates, the California Department of Financial Protection and Innovation (DFPI) launched a new website providing initial guidance on the upcoming reporting requirements for VC firms, signaling that compliance timelines remain on track.

Background: In 2023, California enacted legislation aimed at increasing transparency around diversity in the venture capital industry. Under the requirements, VC firms with a California nexus will be required to collect and annually report aggregated, anonymized demographic data on founding team members of portfolio companies in which they invest. Required disclosures include gender identity, race, ethnicity, sexual orientation, disability status, veteran status, and California residency for each founding team member, as well as investment amounts and percentages allocated to companies founded by individuals from each identified group. DFPI has posted a standardized survey form for fund managers to distribute to founding teams.

Implementation: Beginning March 1, 2026, VC fund managers must register with DFPI by submitting identification information, including firm name and designated point of contact details, though the registration portal is not yet active. The first annual reports are due on April 1, 2026, covering investments made in 2025. DFPI intends to allow a 60-day cure period after notice of non-compliance, after which funds could face penalties of up to $5,000 per day.

Why it matters: California’s VC diversity reporting law will impose a significant new compliance obligation on venture capital funds at a time when federal policy has shifted in the opposite direction. Legal challenges still remain possible, as similar state diversity initiatives have faced constitutional scrutiny.

AI’s wake-up call to Congress

Anthropic CEO Dario Amodei issued a stark warning that superhuman intelligence could emerge within years, causing civilization-level harm absent swift intervention. His warning was blunt: The window for proactive intervention is closing, and policymakers should prepare the public for disruptive change. Amodei argues AI could disrupt up to 50% of entry-level white-collar jobs, amplify national-security risks, and lower the barrier for mass harm, calling on governments, industry, and wealthy individuals to act now, including by:

• Implementing federal AI transparency legislation, requiring AI companies to disclose model risks, failures, and misuse, along with safety defenses built into their systems;
• Cutting off sales of advanced chips and AI-enabling technologies to China
• Preparing to tax future AI-generated wealth and redistribution, warning that unchecked concentration will trigger political backlash.

Why it matters: Amodei is moving beyond abstract safety concerns and into concrete regulatory asks: transparency mandates, export controls, and wealth redistribution. That perspective stands in tension with the Trump administration’s AI posture, which prioritizes speed, dominance, and permissive regulation to avoid ceding ground to China.

Quick hits

• SCOTUS signals support for Fed independence. The Supreme Court appeared skeptical of President Trump’s attempt to fire Fed Governor Lisa Cook, with justices across the ideological spectrum questioning whether presidents can dismiss Fed officials without judicial review. The Fed is expected to hold interest rates steady following its first policy meeting of 2026.
• Private credit investors are cashing out in droves. Individual investors are pulling money from private credit funds at the fastest pace since the boom began. The timing of the spike in redemptions comes at an awkward time when policymakers are pushing to expand retail access.
• Odds of government shutdown are increasing. The deadly shootings in Minneapolis by federal immigration agents have raised the odds of another government shutdown. To avoid a partial government shutdown, the Senate must pass a six-bill funding package before funding expires Friday night.

Upcoming events

• Senate Agriculture Committee hearing: Market Structure Legislation - January 29 at 7:30 a.m. PT/10:30 a.m. ET
• SEC – CFTC Harmonization: U.S. Financial Leadership in the Crypto Era - January 29 at 11:00 a.m. PT/2:00 p.m. ET
• House Financial Services Committee hearing: The Annual Report of the Financial Stability Oversight Council - February 4 at 7:00 a.m. PT/10 a.m. ET
• House Financial Services Committee hearing: A New Day at the SEC: Restoring Accountability, Due Process, and Public Confidence - February 4 at 11 a.m. PT/2:00 p.m. ET
• Carta Event: Fund Economics: Demystifying Operations, Fees, and Expenses - February 5 at 10:00 a.m. PT/1:00 p.m. ET
• House Financial Services Committee hearing: Oversight of the Securities and Exchange Commission - February 11 at 7:00 a.m. PT/10 a.m. ET
• SEC Small Business Advisory Committee: Regulatory Framework for Finders - February 24 at 7:00 a.m. PT/10:00 a.m. ET