U.S. Seeks Global Crypto Leadership with CFTC-Centric Regulatory Framework

The U.S. Senate Agriculture Committee has unveiled a landmark crypto market structure bill, positioning the Commodity Futures Trading Commission (CFTC) as the primary regulator for digital commodities like Bitcoin and Ethereum. The bipartisan draft, introduced by Chair John Boozman (R-AR) and Sen. Cory Booker (D-NJ), aims to resolve years of jurisdictional disputes between the CFTC and Securities and Exchange Commission (SEC) while establishing a unified framework for custody, investor protections, and cross-border compliance U.S. Lawmakers Unveil Crypto Market Structure Bill, CFTC Set to Lead Oversight.

Under the proposal, the CFTC would oversee spot and derivatives trading of digital commodities, with a new Digital Commodity Retail Office tasked with ensuring transparency for retail investors U.S. Lawmakers Unveil Crypto Market Structure Bill, CFTC Set to Lead Oversight. The bill also shields blockchain developers from being classified as money transmitters, a key industry demand for legal clarity Senators Unveil Draft Crypto Bill Giving CFTC Oversight Power. Custody requirements tie crypto assets to U.S. Treasuries, anchoring liquidity to the dollar system and aligning with traditional financial safeguards such as bankruptcy protections U.S. Lawmakers Unveil Crypto Market Structure Bill, CFTC Set to Lead Oversight.

The draft emphasizes market integrity by mandating that exchanges hold customer assets in qualified institutions and invest idle cash in high-quality liquid assets. This framework mirrors bank-grade supervision, reinforcing financial stability while preserving the right to self-custody U.S. Lawmakers Unveil Crypto Market Structure Bill, CFTC Set to Lead Oversight. Analysts note the bill's systemic design could attract global liquidity to U.S.-based exchanges, fostering institutional adoption under a unified rulebook Senators Unveil Draft Crypto Bill Giving CFTC Oversight Power.

However, challenges remain. The CFTC, currently led by a single commissioner, faces staffing concerns as Democrats push for balanced representation on its five-member commission Senators Unveil Draft Crypto Bill Giving CFTC Oversight Power. Unresolved issues include decentralized finance (DeFi) oversight, anti-money laundering provisions, and the classification of tokens resembling securities Bipartisan Senate Proposal Seeks to Extend CFTC’s Reach Into Crypto Spot Markets. Industry groups, such as the Crypto Council for Innovation, have praised the draft as a "meaningful step" toward a "fit-for-purpose" regulatory framework Senators Unveil Draft Crypto Bill Giving CFTC Oversight Power.

The legislation also builds on recent developments, including U.S. Treasury and IRS guidance allowing crypto exchange-traded products (ETPs) to stake assets and distribute rewards to investors Staking Gets Tax Clarity: New US Rules Let ETFs Share Rewards With Investors. This tax clarity, combined with the Senate bill, signals a broader effort to integrate digital assets into traditional finance while mitigating risks.

With the Senate Banking Committee also advancing its portion of market structure legislation, passage hinges on bipartisan cooperation. While Republicans hold the Agriculture Committee, Democrats retain significant influence, requiring at least seven Democratic votes to avoid a filibuster Senators Unveil Draft Crypto Bill Giving CFTC Oversight Power. Lawmakers have until year-end to finalize negotiations, though delays are possible given the complexity of cross-committee coordination Bipartisan Senate Proposal Seeks to Extend CFTC’s Reach Into Crypto Spot Markets.

If enacted, the bill would reassert U.S. leadership in global digital asset markets, balancing innovation with regulatory guardrails. As Bull Theory noted, the proposal "brings crypto closer than ever to full federal recognition" U.S. Lawmakers Unveil Crypto Market Structure Bill, CFTC Set to Lead Oversight.