Senators unveil bill to define crypto rules, give CFTC spot authority

Late Monday night, U.S. senators released a draft bill aimed at settling long-running questions over which federal agency regulates cryptocurrencies and how digital tokens should be classified. Presented as an amendment to H.R. 3633 and titled the Digital Asset Market Clarity Act, the proposal would assign explicit authority over spot crypto trading to the Commodity Futures Trading Commission and set new statutory tests for token classification.

The draft creates a clearer jurisdictional boundary between the Securities and Exchange Commission and the CFTC, a shift the crypto industry has sought for years. Under the bill, certain tokens described in the draft as “network tokens” or “ancillary assets” could be treated as non-securities in particular circumstances. The text ties that classification to whether a token’s value depends on the ongoing efforts of a project team, a definition whose practical application could affect major tokens such as XRP and Solana depending on subsequent rulemaking and interpretation.

Stablecoins receive distinct attention. The draft would bar crypto firms from paying interest solely for holding stablecoins while allowing rewards that are tied to specific activities such as payments or loyalty programs. It also directs the SEC and the CFTC to issue a joint rule requiring clear disclosures about rewards connected to stablecoin use. Sponsors frame these measures as safeguards against hype-driven yield products while preserving legitimate consumer and commercial uses of dollar-pegged tokens.

The bill’s sponsors say the intention is to reduce regulatory confusion, improve market transparency and boost investor confidence in hopes of encouraging long-term institutional participation in assets such as Bitcoin and Ethereum. The House previously passed a crypto market bill, but Senate consideration has been fragmented; the Senate Banking Committee is expected to debate the new draft and the Senate Agriculture Committee is developing its own alternative. The draft is slated to be marked up on Jan. 15, 2026.

Reaction split along predictable lines. Backers argue statutory clarity will limit abrupt enforcement actions and give markets steadier rules of the road. Crypto firms warn that absent a statutory framework they will continue to operate in a space governed by agency guidance that can change with administrations. Banking interests have pushed back on portions of the draft, citing financial-stability concerns and seeking adjustments to the 2025 stablecoin statute that established a federal framework for dollar-pegged tokens.

Senator Elizabeth Warren has explicitly raised alarm about potential erosion of SEC authority, warning of a potential "tokenization loophole" and flagging risks to retirement funds. Ethics-related concerns and key details on stablecoin oversight remain unresolved in the draft and are likely to change as the committees negotiate language.

Passage faces political hurdles. With Congress shifting focus to the 2026 midterm cycle and the possibility of changes in House control, lobbyists and observers express skepticism the measure will become law this session. If it stalls, market participants could remain exposed to a patchwork of enforcement and regulatory guidance. If it advances, the bill would mark a significant reallocation of authority between the SEC and the CFTC and reshape the institutional landscape for crypto oversight in the United States.