Developer Shields Pitched in Standalone Bill as Senate Nears Market-Structure Unveiling

Two Senate committees are scheduled to hold markup hearings on a cryptocurrency market structure bill this Thursday, reviving efforts to get the legislation across the finish line after last year's government shutdown delayed the process according to Seeking Alpha.

The Senate Banking and Agriculture Committees will each prepare new drafts of the bill, which was approved by the House of Representatives in July. The committees will discuss and revise details of the bill at markup.

The bill, called the Digital Asset Market Clarity Act of 2025, defines digital commodity as a digital asset whose value is 'intrinsically linked' to the use of blockchain. The term would exclude securities, derivatives, and stablecoins according to Seeking Alpha.

Why Did This Happen?

The bill clarifies the roles of the Commodity Futures Trading Commission and Security and Exchange Commission in crypto regulation and outlines the registration and compliance standards for entities involved in crypto according to Seeking Alpha.

Democratic leaders on key committees considering crypto market structure legislation are reportedly drawing a line in the sand over elected officials profiting off the industry according to Cointelegraph. A number of Democratic lawmakers in the US Senate are reportedly pushing for conflict-of-interest guardrails in a crypto market structure bill under consideration according to Cointelegraph.

According to a Thursday report from Punchbowl News, Senate Democrats including Adam Schiff and Ruben Gallego demanded safeguards in the Republican-led Responsible Financial Innovation Act (RFIA) which would affect how US regulatory agencies and the government handles digital assets. The lawmakers reportedly pushed for provisions prohibiting public officials, including US President Donald Trump, from profiting from any connections to crypto companies according to Cointelegraph.

What Are Analysts Watching Next?

Galaxy Research's Alex Thorn said the discussions over classifying decentralized finance under anti-money-laundering rules may be the most consequential according to Seeking Alpha.

"Other items under negotiation include the handling of yield from stablecoin reserves, protections for non-custodial developers, and SEC's authority to authorize or cap token issuance," he noted according to Seeking Alpha.

"Enactment of a bipartisan market structure legislation that clearly defines token classifications, delineates regulatory jurisdictions, and protects developers and non-custodial protocols would be a major bullish catalyst for crypto adoption," Thorn added according to Seeking Alpha.

The market structure bill, which passed the US House of Representatives as the CLARITY Act, has been under consideration in the Senate since July. Amid debate over provisions such as addressing potential conflicts of interest and decentralized finance, the bill also faced delays from a 43-day government shutdown in October and November according to Cointelegraph.

Senate Banking Committee Chair Tim Scott said this week that the body would hold a markup on the RFIA on Thursday. As of the time of publication, no markup event was on the committee's public calendar, or that of the Senate Agriculture Committee according to Cointelegraph.

All 435 seats in the House and 33 seats in the Senate are up for grabs, potentially allowing Democrats to regain majority control from the Republicans according to Cointelegraph.

Representatives from crypto companies gathering on Capitol Hill on Thursday. Another advocacy group for crypto and blockchain, The Digital Chamber, announced that it would be facilitating talks between members of Congress and industry representatives on Thursday ahead of the markup for the market structure bill according to Cointelegraph.

Some experts are still concerned that a potential government shutdown at the end of January could slow progress on the bill. In October, US lawmakers failed to reach an agreement on a funding bill, shutting down many federal agencies and furloughing workers for 43 days, the longest in the country's history. The event likely slowed progress on the market structure bill in the Senate after some Republican leaders predicted it would be signed into law by 2026 according to Cointelegraph.

The Senate committees' markup is a critical step toward finalizing the bill. If passed, it could be sent to the House for reconciliation before being submitted to the president for signing. However, given the political landscape and the ongoing debates, the final shape of the bill remains uncertain according to Seeking Alpha.

Analysts suggest that the outcome of these negotiations will have significant implications for the crypto industry, including how digital assets are classified and regulated. It may also determine the extent to which developers and non-custodial protocols are protected under the law according to Seeking Alpha.

The bill is expected to address key issues such as the role of the Treasury Department in policing crypto and developer protections according to CoinDesk.

"I think it’s important for us to get on the record and vote," Scott said in an interview with Breitbart published on Tuesday. "So, next Thursday, we’ll have a vote on market structure. We have worked tirelessly for the last six-plus months making sure that we had multiple drafts available to every member of the committee." according to CoinDesk.

The markup at this stage could better define the final points the Democrats and Republicans need to work out before the final vote according to CoinDesk.