Crypto Market Structure Reform Gets a Second Chance at U.S. Senate

The U.S. Senate Agriculture Committee changed course on crypto legislation this week by introducing its own bill on the structure of the digital market. The move represents a second chance for U.S. lawmakers to reach consensus on an issue that has sparked deep divisions between Democrats and Republicans, especially after the failure of previous negotiations in the Banking Committee.

The Agriculture Committee presents its version: a second chance after the bank failure

The Agriculture Committee released its draft legislation late Wednesday and is scheduled to hold a review hearing next week. This action comes after the Senate Banking Committee postponed its own hearing at the near last minute, leaving the legislative process at a critical point.

Agriculture Committee Chairman John Boozman acknowledged both the challenges and the progress in an official statement: “Although differences remain on fundamental policy issues, this proposal builds on our bipartisan discussion draft and incorporates the thoughtful contributions of Senator Cory Booker and his team. While we have unfortunately not been able to reach a full agreement, I am grateful for the collaboration that has strengthened this legislation.”

What is the scope of this proposed law on market structure?

Legislation on the structure of the crypto market would determine how federal regulators oversee and regulate the digital asset industry. Key points of the Agriculture Committee’s version include:

• Special treatment for developers: Major cryptocurrency developers would not be classified as traditional regulated financial entities, an important safeguard that the industry demanded.

• Strengthened CFTC Role: The proposal elevates the Commodity Futures Trading Commission (CFTC) as the overseer of spot markets for tokens such as Bitcoin (BTC) trading at $84.89K at the current time and Ethereum, which are not classified as securities.

• Legal Liability Shield: Legal protections would remain in place for developers, as long as they do not directly control customer assets.

• Consumer protection: The legislation includes provisions aimed at strengthening investor protection in the crypto market.

Crypto developers seek legal protection without regulatory restrictions

The Agriculture Committee’s proposal moves forward with a more pro-industry and Republican-friendly approach, though it lacks some of the more controversial provisions that fall within the jurisdiction of the Banking Committee, including regulations on stablecoins and provisions against illicit financing.

Since its inception, one of the core goals of the crypto industry has been to create a legal framework that allows decentralized finance (DeFi) to operate without the regulatory constraints that traditional platforms would struggle to meet. However, Democrats express concerns about whether such entities would offer adequate protections to consumers, while the securities industry argues that DeFi firms should be subject to regulations similar to those of traditional financial firms—a requirement that DeFi advocates consider virtually impossible.

DeFi and pending controversies: what remains to be resolved?

The legislative path presents significant obstacles. While Democrats will have a chance to introduce amendments during the review hearing and later when the two versions of the bills are unified, the Agriculture Committee’s proposal is moving forward mostly with Republican support, not the bipartisan backing the industry had hoped for.

Democrats have raised additional concerns, including:

• President Donald Trump’s apparent reluctance to appoint Democrats to fill regulatory vacancies at agencies such as the CFTC and the Securities and Exchange Commission.

• Proposals for an ethics ban that would prevent high-level federal officials from personally benefiting from cryptocurrency investments.

• The need for stricter regulations on stablecoins and illicit financing related to digital assets.

What comes next? The path to final approval

To become law, the final version of this reform on the structure of the crypto market would require the support of at least seven Democrats in the Senate. It is widely anticipated that, if it manages to pass the Senate, it would move smoothly through the House of Representatives, which already passed the similar Digital Asset Market Clarity Act last year.

This bill represents a second chance to establish a coherent regulatory framework after years of lobbying. President Trump has signaled internationally that the United States will soon pass comprehensive crypto legislation, with White House advisers confirming that it is “a matter of when, not if” a comprehensive regulatory framework is put in place.

Crypto lobbyists will meticulously analyze the text in the coming days to assess whether this second chance actually advances the goals the industry has pursued for years: a clear regulatory framework that allows for innovation while protecting consumers.