The Uncertain Future of Crypto Market Structure: A Reverse Question Mark in the Senate

A law on crypto market structure is knocking on their doors in the US Senate, but it continues to be under an uncertain reverse question mark. The new draft published by the Agriculture Committee last Wednesday offers a different approach from the banking committee version, but leaves party lines significantly ambiguous.

Biased Concerns: The Committee Bill’s Consensus Deficit

The Senate Agriculture Committee’s crypto market structure bill aims to define regulatory authority between the CFTC (Commodity Futures Trading Commission) and the SEC (Securities and Exchange Commission). The bill specifically stipulates that digital commodities will fall under the oversight of the CFTC.

However, the draft has not yet achieved complete party unity. “Fundamental policy differences” have been revealed between the Chairman of the Committee, Republican John Boozman, and the chief negotiator, Democrat Cory Booker. Boozman said, “It’s time to move this bill forward,” while Democrats proposed a series of amendments on Friday evening. These proposals will be discussed in the marking session on Tuesday next week.

CFTC and SEC Compromise Signals in Determining Roles

The first analysis of the text of the draft shows that a bipartisan basis is possible on some issues. Notably, the section on the CFTC’s governance bears a consensus on securing a bipartisan commissioner majority, contrary to previous discussions.

According to the text of the Bill, it is defined as “The Commodity Futures Trading Commission must be full-fledged before the enactment of this Act and must be nominated after consultation and coordination with a senior minority member of at least 2 Commissioners prior to appointments”.

However, provisions regarding developer protections remain controversial. Senate Judiciary Committee Chairman Chuck Grassley stated when he passed that such provisions should be within the jurisdiction of his committee. This conflict may delay the bill’s enactment process.

External Factors: Weather and Financial Crisis Prevent

A non-techie, but fairly realistic obstacle, is the blizzard that is expected to hit the East Coast in the coming weeks. The storm is expected to start on Saturday night and last until Monday morning. If senators do not reach the Agriculture Committee session on time on Tuesday, the meeting may have to be postponed.

A more pressing issue is that the US government’s funding will run out on Friday. The House of Representatives passed a funding package on Thursday and sent it to the Senate. The Senate’s vote on this package will consume a significant amount of time and resources next week. This could limit the amount of attention to be devoted to crypto market structure legislation.

Pudgy Penguins: The Reality of NFT Brand Success

When examining successful brands in the sector, Pudgy Penguins stands out. This NFT-centric brand has evolved away from speculation and into a multi-sector consumer IP platform.

Pudgy Penguins’ strategy is to first acquire users from mainstream channels (toys, retail partnerships, viral media) and then integrate them into Web3 (games, NFTs, and the PENGU token). The ecosystem currently does not include a widely distributed token, with physical-digital products (over $13 million in retail sales and more than 1 million products sold), games and experiences (Pudgy Party reached more than 500k downloads in two weeks).

The PENGU token is currently trading at $0.01, with a circulating market cap of $573.29 million and a circulative supply of 62.86 billion, positioning it as a significant success story in the market. While the market prices a premium compared to Pudgy Penguins’ traditional IP peers, sustained success hinges on retail expansion, gaming adoption, and the realization of deeper token utility.

Regulatory Authorities’ Gateway to Crypto

SEC Chair Paul Atkins has stated that it is the “right time” to include cryptocurrency in 401(k) plans, provided retirees are protected. This statement heralds the Senate Agriculture Committee’s advancement of its bill expanding the CFTC’s role.

CFTC Chairman Michael Selig predicts that digital assets will “thrive” under future U.S. regulations. Selig argues that clear national standards could re-attract blockchain companies domestically, making the U.S. a leading hub for crypto markets. The SEC and CFTC chairmen’s holding a joint discussion on Tuesday this week is also an indication of increased coordination in the regulatory field.

Next Week: Critical Milestones and Uncertain Paths

The coming week will be a period of several critical decisions for the future of crypto regulation. The Senate Agriculture Committee will hold a marking hearing on its draft crypto market structure legislation on Tuesday at 8:00 PM UTC (3:00 PM ET).

Sources who follow the situation closely state that even if it does not receive the full support of both parties in its current form, changes may be made to ensure that the bill proceeds on a bipartisan basis. However, it is possible that the bill will proceed in a completely partisan framework, or even not progress at all.

Given the threat of primary challenges funded by crypto political action committees like Fairshake, it may be difficult for him to convince enough Democrats to pass the legislation with a comfortable majority when it sends it to the Senate. Therefore, it may take a few weeks for the Senate Banking Committee to return on crypto market structure legislation.

Next week’s reverse question mark remains open: Will this bill become law by crossing party lines, or will it be postponed by being swallowed into the balances of American politics? This complex picture of weather, budget crisis, and political stakes illustrates what an uncertain journey it is for crypto to enter the legal framework.

CoinDesk, an award-winning media outlet covering the cryptocurrency industry, has been closely monitoring these developments. Journalists act within the framework of a strict content policy, ensuring the integrity, editorial independence and non-bias of publications.