In a significant development for the cryptocurrency industry, the U.S. Senate is advancing a comprehensive new draft bill that could reshape how digital assets are regulated in the United States. Circulated privately on Friday, this legislative proposal aims to establish crucial protections for crypto developers and outlines how federal regulators might support the tokenization of financial markets. The potential implications are vast, setting the stage for a pivotal showdown in the Senate.
A New Framework for Digital Assets
This latest draft from the Senate Banking Committee, which was obtained by CoinDesk, introduces legal safeguards for individuals involved in blockchain and decentralized finance systems. It’s a move that stands to bolster confidence among developers by providing clearer guidelines and protections. Bankruptcy procedures for digital assets are also under scrutiny, with the bill proposing that “ancillary assets” should be considered customer property during such processes.
In an intriguing twist, the bill mandates a collaborative study by the SEC and the CFTC on tokenization—a burgeoning trend where real-world assets are represented as digital tokens. The aim? To create standards for how custodians handle these tokenized assets, potentially paving the way for new regulatory pathways. As it stands, tokenized securities will remain classified as securities, while other tokenized assets that don’t meet this definition will not. This aligns with recent developments where U.S. SEC, CFTC Combine Forces to Clear Registered Firms’ Trading of Spot Crypto, highlighting the growing cooperation between these regulatory bodies.
Political Hurdles and Bipartisan Challenges
The path ahead for this legislation is anything but straightforward. While the House of Representatives made headway earlier this year with the Digital Asset Market Clarity Act, which passed with broad support, the Senate’s version must overcome a higher threshold: securing 60 votes. This requires Republican leaders to garner backing from several Democrats—a tall order given the current political climate.
The legislation’s journey mirrors past efforts, such as the Senate’s successful passage of the GENIUS Act addressing stablecoins, which President Trump urged the House to adopt without modification. The new draft bill, while sharing some similarities with the House’s approach, diverges on key points, particularly in defining the transition of a crypto asset from a security to a commodity. This distinction is crucial, as it determines which regulatory body—SEC or CFTC—will oversee different types of digital assets. For more context on the regulatory landscape, see our coverage of how SEC, CFTC-Registered Exchanges Receive Blessing to Facilitate Spot Crypto Trading.
Timing and Market Impact
Timing remains a pressing issue. Senate Banking Committee Chairman Tim Scott had initially set a September 30 deadline for advancing the bill, a target that seems ambitious given the Senate’s legislative backlog. Senator Cynthia Lummis has optimistically suggested that the bill could be ready for presidential approval by Thanksgiving.
With Congress returning from its August recess, crypto regulation stands as a top priority amid a crowded legislative agenda. The outcome of this bill could signal a seismic shift in how the U.S. approaches digital assets, potentially influencing global market dynamics.
Looking Ahead: What’s Next?
The bill’s next steps involve a markup hearing, where senators can propose amendments before it heads for a Senate floor vote. Navigating these stages will require deft political maneuvering to secure the necessary support from both sides of the aisle.
Should the Senate pass this legislation, the baton will pass back to the House for another vote. Given the House’s previous overwhelming approval of similar crypto measures, there’s a strong likelihood of passage—though nothing is guaranteed in the unpredictable world of politics.
As the Senate grapples with this landmark bill, the crypto industry watches with bated breath. The stakes are high, and the outcome will likely shape the landscape of digital finance in the U.S. for years to come. Whether this legislative effort can strike the delicate balance necessary for bipartisan support remains an open question, one that will continue to unfold in the coming weeks.
Source
This article is based on: Legislation Steering U.S. Fate of Crypto Emerges in New Version in Senate
Further Reading
Deepen your understanding with these related articles:
- The CLARITY Act Defined ‘Mature’ Blockchains. Here’s What It Missed.
- Huge week for tokenized RWAs as Fed preps DeFi, payment talks
- Japan regulator proposes crypto rule overhaul in line with securities law
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
