U.S. senators late Monday released draft legislation aimed at establishing a clear regulatory framework for cryptocurrencies. If enacted, the bill would spell out which federal agencies oversee different parts of the digital asset market, a move that could accelerate broader adoption across the sector.
The crypto industry has lobbied for years for this kind of legislation, arguing that regulatory uncertainty threatens the long-term future of digital assets in the United States and complicates day-to-day operations for crypto firms.
A central feature of the proposal is legal clarity around how crypto tokens are classified. The bill would define when a digital asset should be treated as a security, a commodity, or another category altogether, addressing one of the industry’s most persistent concerns.
Under the proposal, the Commodity Futures Trading Commission would gain authority to oversee spot crypto markets, a role the industry generally favors over supervision by the Securities and Exchange Commission.
The legislation also responds to concerns raised by the banking sector following last year’s law creating a federal framework for dollar-pegged cryptocurrencies, commonly known as stablecoins. Bank representatives had pushed lawmakers to close what they viewed as a loophole that allowed intermediaries to pay interest on stablecoins.
Banks warned that permitting interest payments could draw deposits away from the insured banking system, potentially undermining financial stability. Crypto companies have disputed that claim, saying a ban on interest payments by platforms such as exchanges would unfairly limit competition.
As currently written, the bill would prohibit crypto firms from paying consumers interest simply for holding a stablecoin. However, it would still allow companies to offer rewards or incentives tied to specific activities, such as making payments or taking part in loyalty programs.
The proposal also directs the SEC and the CFTC to jointly develop rules requiring clear disclosures about any rewards connected to the use of stablecoins, increasing transparency for consumers.
Lawmakers are expected to take the next steps soon. The Senate Banking Committee is scheduled to debate the bill and consider amendments on Thursday, while the Senate Agriculture Committee, which is drafting its own version, plans to review its proposal later this month.
The political backdrop adds another layer of complexity. Donald Trump has actively courted crypto industry support, branding himself as a “crypto president,” while his family’s ventures in the sector have helped bring digital assets further into the mainstream.
The industry poured significant funds into the 2024 election cycle to support candidates favorable to crypto regulation, hoping to push this market structure bill over the finish line. Although the House of Representatives passed its own version in July, negotiations stalled in the Senate amid disagreements over anti-money-laundering rules and requirements for decentralized finance platforms, according to sources familiar with the talks.
With Congress increasingly focused on the 2026 midterm elections — and the possibility that Democrats could retake control of the House — some lobbyists doubt the bill will ultimately become law. Without it, crypto companies may continue relying on regulatory guidance that could shift or be reversed under future administrations, industry executives have warned.
