Top U.S. senators have shared the outline of what they’re after in the effort to establish rules of the road for domestic crypto markets, releasing a set of principles on Tuesday as they prepare to further hash out their intentions in an afternoon hearing.
The crypto industry is excited about the recent progress of stablecoin legislation, but the legislation to set up the structure of fully regulated crypto activity is what the sector is most urgently awaiting. The chairman and three other Republicans on the Senate Banking Committee offered this framework, representing half of the team that would need to eventually clear a bill, which also must pass through the Senate Agriculture Committee.
“These principles will serve as an important baseline for negotiations on this bill, and I’m hopeful my colleagues will put politics aside and provide long-overdue clarity for digital asset regulation,” said Chairman Tim Scott said in a statement, joined by Senators Thom Tillis, Bill Hagerty and Cynthia Lummis.
The principles include setting up clear distinctions between digital securities and commodities and a shared regulatory structure that prevents an “all-encompassing” watchdog from emerging; establishing a “small package” of money-laundering protections that are “pro-innovation”; and encouraging the federal regulators to embrace “no-action guidance, sandboxes, safe harbors, coordination and appropriate application requirements.”
So far, the House of Representatives has been in the lead on market structure, clearing its Digital Asset Market Clarity Act through the two necessary committees on its way toward the House floor. But the Senate finished its first crypto priority by passing the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act last week, and it’s now moving on to market structure.
A 3 p.m. hearing of Lummis’ digital assets subcommittee is set for Tuesday to discuss the market structure work.
“While the European Union and Singapore have established clear regulations, the U.S. continues to sit on the sidelines while the digital asset industry seeks greener pastures,” Lummis said in a statement. “That changes today.”
Meanwhile, crypto lobbyists are focused on the House’s strategy for how it’ll approach the two bills. It’ll soon fix on one of three options: passing the GENIUS Act as-is, merging it with the House’s own stablecoin legislation (which requires a second approval from the Senate) or packaging the stablecoin effort with the market structure bill as a single (significantly more complicated) piece of legislation.
This same process will play out if the Senate pursues its own track for the market structure bill, rather than adopt the House’s product. So far, both chambers have seen wide bipartisan support for the crypto initiatives, but Democrats have raised a number of objections rooted in illicit financial concerns, national security and their criticism of President Donald Trump’s personal crypto ties.
Read More: As Trump Calls for Rapid Stablecoin Bill Passage, Key Lawmaker Hints at More Talks
