The U.S. cryptocurrency framework bill is stalled, and the Democratic proposal has sparked strong opposition from the industry

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

Democratic lawmakers submitted a counter-proposal last week that includes strict restrictions on decentralized finance (DeFi) protocols, particularly a "restricted list" mechanism regulated by the U.S. Treasury to label "high-risk" DeFi protocols. The blockchain industry reacted strongly, with Blockchain Association CEO Summer Mersinger warning that the proposal would "effectively ban the development of decentralized finance, wallet development, and other decentralized applications in the U.S.," pushing innovation overseas. Jake Chervinsky, Chief Legal Officer of investment fund Variant, bluntly called the Democratic proposal "not serious," essentially describing it as "an unprecedented and unconstitutional government takeover of the entire industry."

Currently, Republicans and Democrats are blaming each other over amendments to the bill, and negotiations have been paused. The deadline set by Banking Committee Chairman Tim Scott to pass the bill by the end of September has already passed, and the increasing divisions between the two parties have made the prospects of this landmark legislation even more uncertain.