Senate Banking Committee Releases Draft Legislation to Reshape Crypto Market Structure

By CoinEpigraph Editorial Desk | November 11, 2025

After years of deadlock and overlapping enforcement, the Senate Banking Committee has taken the first serious step toward comprehensive crypto-market legislation. A new draft bill unveiled this week seeks to unify regulatory treatment of digital assets, balance innovation with investor protection, and clarify how tokens are issued, traded, and custodied inside the U.S. financial system.

The document—still in discussion form—signals that Congress is moving beyond hearings and enforcement rhetoric toward an actionable framework that could define the next decade of crypto in America.

Breaking Down the Proposal

At its core, the draft bill divides digital assets into two primary categories:

1. Digital Commodities, overseen by the Commodity Futures Trading Commission (CFTC), and
2. Digital Securities, remaining under Securities and Exchange Commission (SEC) jurisdiction.

This split mirrors the bipartisan House “Financial Innovation and Technology for the 21st Century Act” (FIT21) passed earlier in 2025, but the Senate draft introduces new layers of market-structure oversight, reflecting lessons from FTX’s collapse and recent token enforcement cases.

Under the proposal:

• Crypto trading platforms must register with the CFTC if they list digital commodities, or with the SEC if they list digital securities—no dual registration required.
• Stablecoin issuers would face a defined supervisory path, including reserve transparency standards and consumer-protection disclosures.
• Custodians of digital assets would adhere to segregated-account rules akin to those governing broker-dealers.
• Interoperability and cross-market risk disclosures are introduced as new regulatory tools to prevent contagion across DeFi and CeFi entities.

The framework also establishes a “regulatory safe harbor”—a transitional window allowing developers to issue tokens without triggering securities laws, provided the asset achieves sufficient decentralization within a specified timeframe.

A Compromise Between the SEC and CFTC

The most politically sensitive issue—jurisdiction—has become the bill’s defining feature.
For years, the SEC, led by Chair Gary Gensler, argued that most tokens qualify as securities under the Howey Test, while the CFTC insisted many operate more like commodities. This legislative draft attempts to codify peace between the two agencies by setting objective functional tests for determining which regulator governs each asset class.

Those tests hinge on network decentralization, token distribution, and functional use cases—criteria that, if adopted, could replace the SEC’s controversial case-by-case enforcement strategy with statutory clarity.

“The CFTC has the infrastructure to oversee spot crypto markets,” the committee’s Republican co-sponsor noted, “while the SEC retains its rightful focus on investor disclosures and fraud prevention. This bill ensures both agencies operate from a unified rulebook.”

Democratic members, meanwhile, emphasized consumer safeguards and systemic stability, suggesting that public trust is as important as innovation. The tone reflects a rare bipartisan recognition: the crypto market is now too large—and too globally integrated—to remain in regulatory limbo.

Industry Reaction: Guarded Optimism

The draft was immediately circulated across digital-asset circles, eliciting a mix of hope and caution.

Major exchanges such as Coinbase and Kraken praised the proposal’s clarity, noting that dual oversight had created operational and compliance uncertainty. “If enacted, this could finally allow us to plan for five years instead of five months,” one policy executive told CoinEpigraph.

Institutional players—including custodians, ETF issuers, and tokenization startups—view the draft as a potential gateway to legitimacy, particularly for real-world asset (RWA) platforms and stablecoin-backed settlements.

Still, skeptics warn that defining “sufficient decentralization” in statute could prove contentious, inviting lobbying battles over metrics that even computer scientists struggle to quantify.

Crypto-native communities on X (formerly Twitter) voiced a different concern: whether the framework could “institutionalize” crypto too heavily, favoring regulated incumbents over grassroots innovation.

A Turning Point for Policy Credibility

For the Senate, the move is as much about credibility as control. Since 2022, crypto policy has swung between crisis management—think Terra, FTX, and Binance settlements—and moral posturing. The new draft suggests Congress is finally treating blockchain as a structural component of modern markets rather than a speculative fad.

Key to the bill’s credibility is its inter-committee coordination: the Banking Committee collaborated with the Senate Agriculture Committee, which oversees the CFTC, ensuring that both agencies were involved from inception. That cooperation could help the bill survive floor debates and reconcile with FIT21 in conference.

The Committee also incorporated feedback from Treasury, the Federal Reserve, and the Office of the Comptroller of the Currency (OCC), indicating a whole-of-government approach rarely seen in crypto policymaking.

Global Context

Internationally, the timing is strategic. The European Union’s MiCA framework is now in effect, Japan has refined its stablecoin regime, and the UK is preparing its Digital Assets Bill.

If the U.S. continues lagging, capital and innovation risk migrating offshore—especially to regions offering clearer token classification and banking access.

“This draft signals that Washington wants to reassert leadership in digital finance,” said a former Treasury official. “Without legislative clarity, America risks governing blockchain through subpoenas instead of statutes.”

Challenges Ahead

Despite the momentum, obstacles remain formidable.

• The Senate is entering an election year; floor time for complex financial legislation is scarce.
• Some lawmakers view the bill as too lenient on crypto’s systemic risks, while others fear it legitimizes agencies that have been “regulating by enforcement.”
• Implementation will require inter-agency funding, new supervisory technology, and extensive rulemaking—processes that could take years.

Moreover, the definition of decentralization—a central hinge of the bill—may become the fault line. Expect lobbying from every major protocol, foundation, and exchange to shape that language before any final vote.

Conclusion

The Senate Banking Committee’s draft crypto market structure bill may not yet be law, but it marks a historic evolution in the dialogue between innovation and regulation. For the first time, Congress is attempting to legislate the architecture of a parallel financial system—one that operates at the intersection of code, capital, and national interest.

If passed, the bill could transform the United States from a jurisdiction of regulatory anxiety into one of competitive clarity.
If it fails, it will still stand as evidence that Washington has finally begun to understand the stakes of digital markets—not as a political nuisance, but as an economic frontier.

Either way, the spotlight on crypto’s structure has shifted from rhetoric to reality.

At Coinepigraph, we pride ourselves on delivering cryptocurrency news with the utmost journalistic integrity and professionalism. Our dedicated team is committed to providing accurate, insightful, and unbiased reporting to keep you informed in the ever-evolving crypto landscape. Stay tuned as we expand our coverage to include new sections and thought-provoking op-eds, ensuring Coinepigraph remains your trusted source for all things crypto. -Ian Mayzberg Editor-in-Chief

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