Senate Drafts Crypto Rules to Keep Tokenized Stocks in SEC's Lane

The U.S. Senate has advanced its regulatory framework for cryptocurrencies with the unveiling of the Responsible Financial Innovation Act of 2025. The bill, a key legislative priority for the crypto industry, seeks to clarify the regulatory oversight of digital assets and their market structure. A notable addition to the draft is a provision that ensures tokenized stocks and other securities are not treated as commodities, thereby maintaining regulatory consistency with existing securities frameworks. The move addresses concerns from digital asset firms that tokenized assets could otherwise face conflicting regulatory treatment under either the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC).

Senator Cynthia Lummis (R-Wyo.), a primary sponsor of the bill, emphasized the urgency of finalizing the legislation, stating that the Senate aims to have the bill signed by President Donald Trump before the end of the year. The Senate Banking Committee is expected to vote on SEC-related provisions in the coming weeks, with the Agriculture Committee following suit in October for CFTC-related components. A full Senate vote could occur as early as November. Despite bipartisan negotiations being underway, the bill has yet to secure Democratic support. Lummis acknowledged the need for at least seven Democratic senators to back the measure to ensure its passage, as the Senate requires a 60-vote threshold.

The Senate’s legislative effort has been shaped by extensive feedback from stakeholders, with a spokesperson for the Banking Committee noting that the draft reflects input from "hundreds of stakeholders on a wide range of questions." The bill’s structure includes provisions for legal protections for crypto developers and clarifications on bankruptcy procedures for digital asset issuers. Notably, the new draft establishes safeguards for individuals and entities involved in distributed ledger and decentralized finance systems, a move endorsed by a coalition of over 112 crypto firms and advocacy groups. These entities, including Coinbase, Ripple, and a16z, warned that outdated regulatory frameworks risk misclassifying developers and service providers as intermediaries, potentially discouraging innovation in the sector.

The U.S. House of Representatives has already passed its own market structure bill—the Digital Asset Market Clarity Act—with bipartisan support. However, the Senate’s version is expected to serve as the primary legislative vehicle, given its more detailed provisions and stakeholder engagement. A key distinction between the House and Senate bills lies in how they define the transition of a digital asset from a security to a commodity, a matter that will determine which agency holds oversight authority. The Senate’s approach appears to aim for more precise regulatory boundaries, which could reduce ambiguity for market participants.

Regulatory clarity has been a persistent challenge for the crypto industry, with market players citing uncertainty as a barrier to innovation and investment. Data from Electric Capital indicates that the U.S. share of open-source blockchain developers has declined from 25% in 2021 to 18% in 2025, highlighting the urgency for legislative action. The Senate’s efforts to reconcile regulatory responsibilities between the SEC and CFTC also align with a broader trend of inter-agency cooperation. On September 29, 2025, the SEC and CFTC are scheduled to host a joint roundtable to further align their regulatory approaches, signaling a coordinated strategy to address crypto innovation and investor protection.

Source: [1] Senate seeks to rein in stock tokenization in latest crypto bill (https://www.cnbc.com/2025/09/05/senate-stock-tokenization-crypto-bill.html) [2] Senate crypto bill adds clause to keep tokenized stocks ... (https://cointelegraph.com/news/senate-crypto-bill-tokenized-securities-clarification) [3] 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) [4] SEC and CFTC to Host Joint Roundtable on Crypto ... (https://www.mexc.co/fil-PH/news/sec-and-cftc-to-host-joint-roundtable-on-crypto-regulation/86540)