Senate Democrats on Tuesday blocked legislation to create a new regulatory framework for cryptocurrency, stalling an industry-backed effort to place new guardrails around digital assets after demanding more limits on President Donald Trump’s investments.

The 49-50 vote on whether to move forward with the legislation was a pivotal election-year test for the $2.3 trillion cryptocurrency market as the industry has pushed aggressively for a uniform set of rules. The Senate debate came as cryptocurrency companies have become a major political force, and as Trump has amassed significant wealth in crypto while in office.

While some Democrats are friendly toward the industry and support the idea of regulation, they have been adamant that the…