US Senate Moves Forward with Crypto Market Structure Bill

The U.S. Senate Agriculture, Nutrition, and Forestry Committee has taken a historic step in shaping cryptocurrency regulation by advancing the crypto market structure bill, formally known as the Digital Commodity Intermediaries Act, through committee markup.

This legislative progress marks a pivotal moment in Congress’s effort to establish a comprehensive federal framework for digital asset markets, clarify regulatory roles for federal agencies, and strengthen consumer protections while allowing innovation in the digital asset space to continue.

The bill now advances to further consideration in the Senate and will face a broader political landscape before it can potentially become law.

• What Does the Bill Do?
• Regulatory Authority and Oversight
• Political Dynamics and Partisan Vote
• Next Steps in the Senate and Beyond
• Industry and Market Impact

What Does the Bill Do?

The Digital Commodity Intermediaries Act, as advanced by the Senate Agriculture Committee, seeks to establish a clear federal regulatory framework for digital assets, particularly those classified as digital commodities. The legislation would grant the U.S. Commodity Futures Trading Commission (CFTC) authority to regulate cryptocurrency spot markets and oversee digital commodity exchanges, brokers, and dealers.

Key elements of the bill include:

• Legal definitions of digital commodities to bring clarity to the market and distinguish them from traditional securities.
• Consumer protection measures, including segregation of customer funds and conflict-of-interest safeguards, designed to protect retail crypto participants.
• A registration regime for digital asset intermediaries to ensure transparent and regulated market participation.
• Requirements for coordinated rulemaking between the CFTC and the Securities and Exchange Commission (SEC) in areas of overlapping jurisdiction.

Committee Chairman Senator John Boozman (R-Arkansas) underscored the bill’s importance, stating, “This is a critical step toward creating clear rules for digital asset markets. Advancing this bill brings us closer to a U.S. regulatory framework that protects consumers while allowing American innovation and businesses to thrive.”

Regulatory Authority and Oversight

One of the most consequential aspects of the Agriculture Committee’s bill is the reaffirmation of the CFTC’s authority over digital commodity spot markets, an area that has long been contested among federal regulators. The legislation aims to draw a clearer boundary by assigning primary oversight of digital commodity markets to the CFTC, while the SEC retains jurisdiction over securities.

Under the bill’s framework:

• The CFTC would register and supervise entities involved in digital commodity trading, including exchanges and intermediaries.
• Digital commodity custodians and service providers would be subject to defined compliance and disclosure standards.
• Measures would be implemented to prevent market manipulation and protect retail investors.

These changes are intended to deliver long-sought regulatory certainty to an asset class valued at more than $2 trillion that has operated under fragmented oversight for years.

Political Dynamics and Partisan Vote

While advancement of the bill through the Agriculture Committee represents meaningful progress toward comprehensive crypto legislation, it passed along partisan lines by a 12–11 vote, reflecting ongoing political divisions over its scope and provisions.

No Democrats on the committee supported the bill at this stage, signaling concerns around issues such as the treatment of decentralised finance (DeFi) and ethical safeguards for public officials involved in shaping crypto policy.

Senator Cory Booker (D–New Jersey), the committee’s ranking Democrat, raised objections to specific provisions, particularly those related to decentralised finance and conflict-of-interest protections. While he did not support advancing the bill, Senator Booker indicated that bipartisan agreement could still be possible if these concerns are addressed in subsequent negotiations.

This divide highlights that, although the need for regulatory clarity in digital assets is broadly recognised, the legislative path forward remains politically contested.

Next Steps in the Senate and Beyond

After clearing the Agriculture Committee, the Digital Commodity Intermediaries Act faces several additional steps:

1. Senate Banking Committee Review

A related bill addressing other aspects of crypto market structure, including securities and stablecoin regulation, is currently before the Senate Banking Committee. That committee has temporarily delayed its markup as negotiations continue over the broader legislative package.

2. Full Senate Vote

For the Agriculture Committee’s bill to reach the Senate floor, it must secure support from a wider group of senators. Given the partisan split in committee, progress will likely require amendments and compromise.

3. House Reconciliation and Presidential Signature

If approved by the Senate, the bill must be reconciled with the House’s crypto market legislation, including measures such as the CLARITY Act, which previously passed the U.S. House of Representatives. Following reconciliation and passage in both chambers, the legislation would then be sent to the President for signature.

Industry and Market Impact

The cryptocurrency industry has consistently argued that regulatory uncertainty in the United States drives innovation overseas and places domestic firms at a disadvantage. Many industry leaders view a comprehensive market structure bill as essential for supporting capital formation and investor confidence in the rapidly evolving digital asset sector.

Investors and crypto companies have reportedly devoted substantial resources to engaging with lawmakers on the legislation, underscoring the industry’s growing demand for regulatory clarity to enable sustainable long-term growth.

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