The US Senate's two committees are scheduled to hold a markup hearing this Thursday for a cryptocurrency market structure bill. This action reinitiates the effort to ultimately pass the legislation after the process was delayed last year due to the federal government shutdown. The Senate Banking Committee and the Agriculture Committee will each prepare a new version of the bill, which was already passed by the House of Representatives in July of last year. During the markup hearing, the committees will discuss and amend the details of the legislation.
Titled the "Digital Asset Market Clarity Act of 2025," this bill defines a "digital commodity" as a digital asset whose value is "intrinsically linked to the use of a blockchain." This definition would explicitly exclude securities, derivatives, and stablecoins. The bill clarifies the division of responsibilities between the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) in cryptocurrency oversight and outlines the registration and compliance standards that relevant entities in the crypto space must follow.
Senate Banking Committee Chairman Tim Scott stated, "The core objective of this bill is to position the United States as the global hub for the cryptocurrency industry—ensuring the next generation of jobs and innovations are established here at home, not overseas. By establishing clear and definitive regulatory rules, we can instill confidence in entrepreneurs, encouraging them to start businesses, hire employees, and grow right here in America."
Alex Thorn, Head of Research at Galaxy Research, indicated that the debate over whether to include decentralized finance (DeFi) under anti-money laundering rules could be the most far-reaching topic. He noted, "Other issues still under negotiation include how to handle the yields generated from stablecoin reserves, protections for non-custodial developers, and the SEC's authority to authorize or restrict token issuance." He added, "If a bipartisan-supported cryptocurrency market structure law can be passed, one that clearly defines token classification, delineates regulatory authority, and protects developers and non-custodial protocols, it would serve as a significant positive catalyst for the adoption of cryptocurrencies."
However, investment bank TD Cowen suggested that while cryptocurrency market structure legislation has room to advance this year, it is more likely to be passed in 2027, with final rules potentially not taking effect until 2029. The bank cited the primary obstacle as controversy over conflict-of-interest provisions: Democrats may push to restrict senior officials (including US President Trump) and their family members from holding or operating crypto businesses. To facilitate the bill's passage, this provision might be delayed by approximately three years before taking effect, potentially to avoid applying to Trump.
It is noteworthy that Coinbase Global, Inc., the largest US cryptocurrency exchange, is intensifying its lobbying efforts with American lawmakers. The company is attempting to preserve its business model of offering rewards to stablecoin holders within the crypto asset market structure bill as it moves to the Senate for consideration. According to sources, if the bill introduces restrictions on reward mechanisms that go beyond disclosure requirements, Coinbase may reconsider its support for the legislation.
Reportedly, Coinbase generates yield from the USD Coin (USDC) stablecoins that users hold on its platform and then distributes a portion of that interest to users under the label of "rewards." Banks are concerned that this practice amounts to "offering high-interest deposits" without being subject to reserve requirements or FDIC insurance. Coinbase, however, insists this is merely a "marketing reward" and not a "deposit interest." Consequently, if the cryptocurrency market structure bill were to define such practices as "deposits" or prohibit third parties from distributing interest, Coinbase's revenue stream from stablecoin interest could be severely curtailed.
Industry insiders reveal that the bill currently under consideration intends to strictly limit the authority to issue such rewards to regulated financial institutions. Some in the banking sector support this approach, believing that practices like Coinbase's could divert deposits away from traditional banks. Coinbase has already applied for a national trust charter; if approved, it could offer user rewards compliantly within a regulatory framework. Meanwhile, native crypto companies are vigorously advocating for an exception clause that would allow their platform reward models to continue even without a banking charter, warning that broader restrictions could fundamentally disrupt the existing competitive landscape of the industry.
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