Senate Bill Aims to Define Crypto's Place in U.S. Financial Future

The U.S. Senate has introduced a new legislative proposal that calls for the creation of a joint advisory committee between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to oversee digital asset regulation. This initiative is part of the broader Responsible Financial Innovation Act 2025, an updated version of the Senate’s crypto market structure bill. The act aims to streamline the regulatory landscape for digital assets and promote a more cohesive approach between the two major financial regulatory bodies in the United States [5].

The new draft of the bill introduces a framework for the formation of a Joint Advisory Committee on Digital Assets, which would include up to 14 non-government members from the crypto industry, academia, and user communities, in addition to input from the National Institute of Standards and Technology in a non-voting capacity [5]. This committee is expected to provide nonbinding recommendations on regulatory matters, including oversight, harmonization of rules, and the development of tailored regulatory pathways. The inclusion of industry and user representatives aims to foster a balanced and inclusive regulatory approach, addressing concerns from both market participants and regulators [5].

One of the key objectives of the bill is to clarify the regulatory status of various crypto activities. For instance, the updated draft explicitly exempts certain activities such as staking, airdrops, and DePIN (Decentralized Physical Infrastructure Networks) from being classified as securities. This aligns with the SEC’s recent guidance that staking is not a security activity, thereby reducing the risk of overregulation and encouraging innovation in the sector [7]. Furthermore, the bill seeks to protect software developers by shielding them from being treated as financial institutions under existing securities laws, provided they do not take custody of user funds or exert central control over the system [5]. This provision has been widely supported by industry players, including major crypto firms such as Coinbase, Kraken, and Ripple, who argue that regulatory clarity is essential for retaining U.S. leadership in blockchain innovation [3].

The Responsible Financial Innovation Act also introduces bankruptcy-related provisions to align digital commodities and ancillary assets with traditional securities and cash in the context of insolvency. This ensures that customer claims are not limited to cash or traditional securities but explicitly extend to crypto and related digital assets [5]. Such a move is intended to provide a more equitable treatment of digital assets in bankruptcy proceedings, addressing gaps in current legal frameworks and offering greater investor protections.

Another notable development in the bill is the proposal for a joint study by the SEC and CFTC on the tokenization of securities and real-world assets. This study is expected to examine the potential regulatory standards for third-party custodians handling tokenized assets and explore the development of "tailored regulatory pathways" if necessary [6]. The outcome of this collaborative effort could pave the way for a more structured and scalable approach to asset tokenization, a rapidly growing trend in the financial sector. The study is also expected to contribute to the broader goal of creating regulatory clarity and reducing jurisdictional conflicts between the two agencies [6].

The Senate’s approach to the crypto bill has drawn attention for its emphasis on collaboration and innovation, particularly when compared to the House’s Digital Asset Market Clarity Act, which was passed earlier this year. While both chambers are working toward a common goal of regulatory clarity, the Senate’s bill has introduced more detailed provisions that reflect the complexities of the digital asset ecosystem. This includes a clear delineation of responsibilities between the SEC and CFTC and mechanisms for resolving disputes in their oversight of the industry [4]. The bill is currently undergoing further revisions to secure bipartisan support, with discussions ongoing to incorporate proposals from Democratic lawmakers [4]. If passed, the Responsible Financial Innovation Act could significantly shape the future regulatory environment for digital assets in the United States and reinforce the country’s position as a global hub for blockchain innovation.

Source: [1] SEC-CFTC Project Crypto-090225 (https://www.sec.gov/newsroom/speeches-statements/sec-cftc-project-crypto-090225) [2] SEC and CFTC Staff Issue Joint Statement on Digital Asset (https://www.jdsupra.com/legalnews/sec-and-cftc-staff-issue-joint-2692886/) [3] Senate crypto bill adds clause to keep tokenized stocks (https://cointelegraph.com/news/senate-crypto-bill-tokenized-securities-clarification) [4] Legislation Steering U.S. Fate of Crypto Emerges in New Version in Senate (https://www.coindesk.com/policy/2025/09/05/legislation-steering-u-s-fate-of-crypto-emerges-in-new-version-in-senate) [5] Crypto Regulation: US Senate Banking Updates Market (https://www.mitrade.com/au/insights/news/live-news/article-3-1101482-20250906) [6] Legislation Steering U.S. Fate of Crypto Emerges in New (https://finance.yahoo.com/news/legislation-steering-u-fate-crypto-204905780.html) [7] Senate Banking Committee Releases Updated Draft (https://coingape.com/senate-releases-updated-draft-crypto-market-structure-bill/)