Blockchain Clarity at Stake as Senate Drafts Crypto Regulatory Line

The U.S. Senate has introduced a key update to its 2025 crypto market structure bill, clarifying regulatory oversight for tokenized assets. The revised provision ensures that tokenized stocks and other securities are treated as securities rather than commodities when tokenized on a blockchain. This distinction is critical for firms developing tokenization platforms, as it aligns these assets with existing broker-dealer frameworks and trading systems, avoiding regulatory ambiguity [1].

The updated bill, known as the Responsible Financial Innovation Act of 2025, seeks to delineate the roles of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) in overseeing digital assets. Under the proposed structure, digital assets will be regulated as either securities or commodities depending on their characteristics. This approach is intended to reduce legal uncertainty for developers and service providers in the crypto ecosystem [2].

Senator Cynthia Lummis, a primary sponsor of the legislation, emphasized the urgency of finalizing the bill. She stated that the Senate Banking Committee is expected to vote this month on the SEC-related provisions, with the Agriculture Committee set to consider CFTC oversight in October. A full Senate vote could occur as early as November, with Lummis expressing confidence that bipartisan negotiations are underway to ensure broad support for the bill [1].

Despite Republican leadership's push for passage, the bill has yet to secure support from Senate Democrats. Lummis acknowledged ongoing efforts to foster collaboration between Democratic and Republican lawmakers on key sub-issues, aiming to build consensus on core elements of the legislation. She noted that at least seven Democratic senators would need to support the bill for it to pass, even with full Republican backing [1].

Meanwhile, a coalition of 112 crypto firms, investors, and advocacy groups has urged the Senate to include protections for software developers and non-custodial service providers in the final version of the bill. These entities argue that outdated financial regulations risk misclassifying them as intermediaries, potentially stifling innovation and driving talent abroad. The coalition cited data from Electric Capital showing that the U.S. share of open-source blockchain developers has fallen from 25% in 2021 to 18% in 2025 [2].

As the bill moves closer to finalization, stakeholders in the crypto industry are closely monitoring developments. The outcome of the Senate’s legislative process will have significant implications for how digital assets are regulated, the competitiveness of the U.S. blockchain sector, and the clarity provided to market participants [2].

Source:

[1] Senate stock tokenization crypto bill (https://www.cnbc.com/2025/09/05/senate-stock-tokenization-crypto-bill.html)

[2] Senate crypto bill adds clause to keep tokenized stocks (https://cointelegraph.com/news/senate-crypto-bill-tokenized-securities-clarification)