The Democratic Party's DeFi regulatory proposal in the U.S. Senate has faced criticism from Republicans and the encryption industry.

[US Senate Democrats' DeFi Regulatory Proposal Criticized by Republicans and the Crypto Industry] The US Senate Democrats have proposed a six-page proposal aimed at preventing illegal activities in Decentralized Finance (DeFi), which has sparked strong criticism from Republican lawmakers and the crypto industry. The proposal requires regulatory agencies such as the Treasury to determine whether "protocols are sufficiently decentralized" and views individuals or entities that design, deploy, or operate DeFi front-end services as intermediaries. Crypto industry insiders warn that the proposal is almost tantamount to banning DeFi and Wallet development, which could force related development overseas. A Republican committee spokesperson stated that the Democrats have not committed to a debate time for the proposal, that the document is informal and the policy ideas are chaotic, making it difficult to push market structure legislation forward. Experts point out that the final Senate bill will need some Democratic support and coordination with the House version.