Main Points：
- Senator Cynthia Lummis is pushing to pass the Senate version of the crypto market structure bill—building on the House-passed CLARITY Act—by the end of 2025.
- The Senate plans to move the bill through the Banking Committee by late September, then the Agriculture Committee in October, addressing how to divide oversight between SEC and CFTC.
- A broad, semi-bipartisan coalition is emerging, with Tim Scott estimating 12 to 18 Democrats may support the bill—but critics raise concerns about weakening SEC oversight and potential systemic risks.
- Additional Republican crypto supports like the GENIUS Act (stablecoin regulation) have already become law; however, CBDC-related legislation is likely deferred to 2026.
- The discussion draft introduces key innovations such as defining “ancillary assets,” disclosure mandates, and tailored SEC rulemaking to modernize regulations.
- Democrats caution that the concept of “ancillary assets” could bypass securities protections, potentially imperiling financial stability and retirement funds.
- Passing this bill could significantly enhance regulatory clarity, attracting innovation and capital that has previously shifted offshore.
Background and Legislative Timeline
At the Wyoming Blockchain Symposium held in Jackson Hole, Senator Cynthia Lummis expressed strong confidence that the U.S. Senate will pass a comprehensive crypto market structure bill by the end of 2025, ideally before Thanksgiving. She outlined an aggressive timeline: approval by the Senate Banking Committee by the end of September, followed by review in the Senate Agriculture Committee during October. Her goal is to deliver the finalized bill to President Trump’s desk before year-end.
This legislation builds upon the Digital Asset Market Clarity (CLARITY) Act, which the House approved in July with bipartisan support, including 78 Democrats. Lummis emphasized her intent to respect and preserve House work, noting that the Senate bill would use CLARITY as its foundation while making necessary adjustments: “[We] want to honor as much of the House’s work as we can… CLARITY will probably end up being what passes, but CLARITY as tweaked by the Senate”.
Committee Strategy and Regulatory Control
Senate Banking Committee Chairman Tim Scott echoed Lummis’s timeline, affirming that 12 to 18 Democrats are potentially open to supporting the bill once it passes committee review. The bill also aims to resolve the ongoing jurisdictional tug-of-war between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
In July, Lummis, Scott, Senator Bill Hagerty, and Senator Bernie Moreno released a discussion draft of the legislation, and opened a Request for Information (RFI) to gather stakeholder feedback. They also laid out guiding principles, such as clearly defining digital assets’ legal status and modernizing securities regulation to avoid stifling innovation.
Key Features of the Draft Bill
The draft bill introduces several structural reforms:
- Definition of “Ancillary Assets” to clarify which digital assets are not securities.
- Tailored Disclosure Requirements for offers or sales of ancillary assets.
- Mandating new rules by the SEC, including:
- Regulation DA, exempting certain offers of ancillary assets from SEC registration, such as offerings up to $75 million per year over four years.
- Clear definitions of what qualifies as an investment contract.
- Updating securities rules to suit digital asset activities without being overly burdensome.
Other Crypto Legislation: GENIUS Act and CBDC Pushback
Amid this bill’s development, Congress has already passed related crypto laws. The GENIUS Act, which regulates payment stablecoins, advanced rapidly through both chambers and was signed into law by the President.
On the other hand, legislation aimed at curbing central bank digital currencies (CBDCs)—including the Anti‑CBDC Surveillance State Act—received minimal Democratic support and remains stalled. Republicans have prioritized market structure first, deferring CBDC regulation to a likely 2026 timeline.
Pushback from Democrats and Financial Stability Concerns
Despite bipartisan momentum, some Senate Democrats, notably Senator Elizabeth Warren, have voiced strong objections to the draft legislation. Critics warn that the “ancillary asset” framework could provide a loophole allowing issuers to evade regulatory scrutiny by the SEC, transferring oversight to the chronically underfunded CFTC.
Concerns extend to possible risks to retirement accounts, FDIC‑insured institutions, and the broader banking system. Democrats argue that diluting SEC authority and weakening financial protections could heighten systemic risk and micro‑market volatility, potentially triggering a “financial meltdown”. Lummis defended the approach, stating that ancillary assets offer clearer legal boundary drawing and consumer disclosures.
Why This Legislation Matters for Crypto Innovators
For developers, investors, and blockchain-focused businesses, this legislation could represent a turning point in U.S. crypto regulation. For years, ambiguity around whether crypto tokens are securities or commodities hindered growth, pushing innovation overseas to jurisdictions like Europe (MiCA), Singapore, and Hong Kong.
Establishing a clear, unified regulatory framework could:
- Attract capital and technical talent to the U.S.
- Provide legal certainty to crypto projects, exchanges, and service providers.
- Enable responsible innovation balanced with consumer protection.
- Elevate the U.S. back to a leadership role in digital asset regulation.
By meeting the year-end timeline, the U.S. could close the gap with international peers and offer a stable, innovation-friendly environment for blockchain initiatives.
Conclusion
Senator Cynthia Lummis and her Republican colleagues are leading a determined effort to establish a comprehensive crypto market structure law before the end of 2025. Using the House-passed CLARITY Act as their anchor, they aim to craft a Senate version—named the “Responsible Financial Innovation Act”—that clarifies asset definitions, regulators’ roles, and modern disclosure rules.
With committee deadlines approaching, supportive signals from a modest number of Democrats, and prudent integration of existing stablecoin legislation, a path to passage seems feasible. Yet, strong Democratic objections remain focused on consumer safeguards and financial stability.
If enacted, the bill could mark a watershed moment: not just for legislative reform—but for the U.S. crypto industry’s long-term viability, competitiveness, and innovation. For stakeholders seeking the next breakthrough in crypto, the outcome of this effort could determine whether America becomes the launchpad or the laggard in the global digital asset economy.
