Just a few months ago, the crypto industry seemed unstoppable in Washington. It had the support of a pro-crypto president in Donald Trump, a slew of new pro-crypto legislators in both parties, and newly elevated regulators who pledged to not impede the industry’s growth. Many assumed the speedy passage of pro-crypto legislation as a foregone conclusion after Trump asked Congress to send him a stablecoin bill to sign by August.

That momentum hit a major snag over the last few days, as Trump’s expanding investment in the industry coincides with a revolt from Democrats who had previously supported the leading crypto legislation.

On Tuesday, California Rep. Maxine Waters, the ranking Democrat on the House Financial Services Committee,…