Senate Republicans Unveil Six Core Principles for Digital Asset Regulation

The Senate Republicans have recently unveiled a set of core principles aimed at establishing a clear market structure for digital assets. This move comes as debates over cryptocurrency regulations intensify, with a particular focus on defining the legal status of digital assets and allocating jurisdiction among regulators. The principles emphasize the need for clear jurisdictional boundaries between agencies to prevent any single regulator from having an all-encompassing oversight role.

The principles were shared by Republican Senators Tim Scott and Cynthia Lummis, who are leading the effort to provide digital asset companies with much-needed regulatory clarity. The initiative aims to foster innovation and maintain the United States' competitiveness in the global digital asset markets. The principles also address the regulatory uncertainty that has long plagued Bitcoin and other digital assets, seeking to establish a framework that promotes both innovation and consumer protection.

On June 24, 2025, the Senate Banking Committee—led by Chairman Tim Scott, along with Senators Cynthia Lummis, Thom Tillis, and Bill Hagerty—released six core principles that will guide future legislation on digital asset regulation. These guidelines lay the foundation for a discussion draft of a potential market structure bill. The principles stress the importance of clearly distinguishing between digital asset securities and commodities. This clarity would help create a consistent legal framework and reduce uncertainty for businesses and investors.

Jurisdiction would be clearly divided among regulators like the SEC and CFTC. Importantly, the plan avoids setting up a new crypto-specific regulator. Rules would be adjusted based on whether a platform is centralized or decentralized. New regulatory exemptions and frameworks are proposed to support token fundraising, improve registration processes, and encourage the tokenization of traditional financial assets. The principles include consumer protections for centralized crypto platforms, including capital requirements, clear custody rules, and ensuring customer assets are safeguarded during bankruptcies.

A targeted anti-money laundering strategy is recommended. It includes expanding laws to cover U.S.-linked platforms while maintaining room for innovation. Support is given to tools like no-action letters, regulatory sandboxes, and safe harbors to help clarify the rules and coordinate across agencies. This is a major step by Senate Republicans toward shaping comprehensive digital asset regulation in the U.S. It signals bipartisan intent to tackle crypto policy, coming on the heels of the GENIUS Act. With global competitors moving quickly, U.S. lawmakers are under pressure to keep pace.

The Senate Banking Committee's subcommittee on digital assets held a hearing to discuss these principles, although only five out of the eleven typical members were present. The hearing featured questions from Republican senators Dave McCormick, Bill Hagerty, and Bernie Moreno, as well as Democratic senator Angela Alsobrooks. The experts present included former US Commodity Futures Trading Commission Chair Rostin Behnam, Coinbase’s vice president of legal, Ryan VanGrack, Multicoin Capital’s general counsel, Greg Xethalis, and University of Pennsylvania Wharton School Executive Director, Sarah Hammer.

Senator Lummis acknowledged the lack of bipartisan participation in the hearing, expressing a desire to ensure that any legislation introduced has adequate input from both sides of the aisle. She also noted the potential for conflicts of interest, given the administration's ties to the crypto industry. Despite these challenges, the principles laid out by the Senate Republicans represent a significant step towards establishing a clear and comprehensive regulatory framework for digital assets in the United States.