SEC Chair Anticipates Trump Signing Crypto Market Structure Bill

The U.S. Senate has introduced the Digital Asset Market Clarity Act, a draft bill aiming to bring regulatory clarity to the crypto market. The bill, led by Senator Cynthia Lummis, proposes a framework that defines the roles of the SEC and CFTC in overseeing digital assets. The legislation could mark a significant step toward reducing regulatory overlap and fostering innovation in the U.S. crypto sector.

The draft bill outlines rules for stablecoins, including a ban on offering interest or yield simply for holding payment stablecoins. However, activity-based rewards—such as those tied to transactions or platform usage—are permitted. These provisions aim to prevent unfair advantages in the market while supporting innovation.

DeFi developers are also included in the bill's scope. The Blockchain Regulatory Certainty Act, part of the proposal, offers protections for developers who do not control user funds. This could help reduce the regulatory burden on decentralized platforms and encourage more innovation in the space.

Why Did This Happen?

The bill emerged from bipartisan discussions and negotiations, with the Senate Banking Committee releasing a negotiated version in early January. Chairman Tim Scott emphasized the need for clear rules to protect investors and ensure the U.S. remains a leader in financial innovation.

The House had passed its version of the bill—known as the CLARITY Act—in July 2025, but the Senate version includes additional provisions, particularly on DeFi and stablecoin rewards. The bill's draft aims to align the regulatory frameworks of the SEC and CFTC, which have been criticized for overlapping oversight.

How Did Markets React?

Crypto market participants and institutional investors have welcomed the draft as a potential catalyst for stability and transparency. Clearer regulations could encourage long-term investment in assets like Bitcoin and Ethereum, reducing the risk of sudden enforcement actions. Some industry observers believe the bill could lead to more institutional participation in the crypto market.

However, the bill has also drawn criticism. Galaxy Digital warned that the draft could expand the Treasury Department's surveillance and enforcement powers, including the ability to freeze transactions without a court order. This has raised concerns about privacy and regulatory overreach among some market participants.

What Are Analysts Watching Next?

Industry groups and lawmakers are closely monitoring the bill's treatment of stablecoin rewards. Banking groups have pushed for broader restrictions, arguing that yield-based incentives could draw deposits away from traditional banks. On the other hand, crypto platforms like Coinbase argue that such restrictions would weaken competition and innovation.

The bill also includes provisions to address potential conflicts of interest involving public officials. Some Democratic senators have pushed for ethics clauses to prevent individuals from profiting from connections to crypto companies. These provisions could face pushback from the Trump administration, which has emphasized rapid implementation.

The final version of the bill will depend on the negotiations between the Senate Banking and Agriculture Committees. With over 137 proposed amendments to consider, the markup process could be contentious. If passed, the bill will need to be reconciled with the House version before being sent to the Senate floor.

Paradigm's regulatory affairs vice president, Justin Slaughter, has warned that even if the bill is passed, its implementation could take years due to the lengthy rulemaking process. He compared it to the Dodd-Frank Act, which took several years to fully implement after its passage.

With a markup scheduled for January 15, the bill's fate remains uncertain. While supporters believe it could provide much-needed clarity for the crypto market, critics argue it could impose burdensome restrictions on innovation and competition.