"Senate Crypto Bill Aims to Keep Tokenized Stocks in SEC's Crosshairs"

The U.S. Senate has advanced its legislative agenda for cryptocurrency markets with the release of an updated version of the Responsible Financial Innovation Act of 2025, a bill designed to clarify regulatory oversight for digital assets. The updated draft, circulated on Friday, adds provisions aimed at preventing tokenized stocks and other securities from being classified as commodities, ensuring they remain within the framework of securities regulation. This clarification is particularly important for digital asset firms engaged in tokenization, as it maintains compatibility with existing broker-dealer systems and trading platforms.

Senator Cynthia Lummis (R-Wyo.), a primary sponsor of the bill, emphasized the urgency of the legislation, stating that the goal is to have the bill signed into law before the end of the year. The Responsible Financial Innovation Act seeks to define when digital assets should be regulated under the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC). Lummis noted that the Senate Banking Committee is expected to vote on the SEC-related provisions this month, while the Agriculture Committee will consider CFTC oversight in October, with a full Senate vote potentially occurring as early as November.

The bill also includes provisions to protect software developers and non-custodial service providers, a key demand from the crypto industry. A coalition of 112 crypto companies, including Coinbase, Kraken, Ripple, and Uniswap Labs, had previously lobbied for such protections, warning that outdated financial rules risk misclassifying developers as intermediaries. This, they argued, could stifle innovation and drive talent away from the U.S. market, a concern underscored by data from Electric Capital showing a decline in the U.S. share of open-source blockchain developers from 25% in 2021 to 18% in 2025.

The Senate’s draft builds upon the House’s Digital Asset Market Clarity Act, which passed with bipartisan support in July. However, the Senate version includes additional sections not found in the House bill, such as bankruptcy provisions for digital asset issuers and legal protections for developers of distributed ledger systems. These provisions are intended to address gaps in existing financial laws and provide a more comprehensive regulatory framework for the rapidly evolving crypto market.

While the bill has not yet secured support from Senate Democrats, Lummis indicated that bipartisan negotiations are ongoing. The Senate requires 60 votes for passage, meaning that Republican leaders will need to secure at least seven Democratic votes to ensure the bill’s success. The House version of the bill passed with 78 Democratic votes, indicating a potential path for broader bipartisan support.

The updated version of the Responsible Financial Innovation Act also reflects feedback from hundreds of stakeholders, according to a statement from the Senate Banking Committee. The bill is expected to undergo further revisions as it moves through the legislative process, including potential amendments during a markup hearing and a final Senate vote.

Source: [1] Senate crypto bill adds clause to keep tokenized stocks ... (https://cointelegraph.com/news/senate-crypto-bill-tokenized-securities-clarification) [2] Legislation Steering U.S. Fate of Crypto Emerges in New ... (https://www.coindesk.com/policy/2025/09/05/legislation-steering-u-s-fate-of-crypto-emerges-in-new-version-in-senate) [3] Senate seeks to rein in stock tokenization in latest crypto ... (https://www.cnbc.com/2025/09/05/senate-stock-tokenization-crypto-bill.html) [4] Senate Banking Committee finalizes updated market ... (https://blockworks.co/news/senate-crypto-market-structure-bill)