A group of 12 Democratic US senators has introduced a competing framework for crypto market structure legislation, emphasizing the importance of achieving a strong bipartisan agreement.
The senators, some of whom serve on the Senate banking committee, publicly shared their policy blueprint on Tuesday. This release counters the Republicans’ market structure bill scheduled for a vote this month.
The Democrats’ framework mirrors the Republican draft unveiled on September 5 by including detailed proposals to clarify regulations. It defines the roles of the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) concerning digital assets.
The senators highlighted the necessity for clear, consumer-protective rules that maintain market integrity. They underscored the need to prevent digital assets from being used to fund illicit activities or personal enrichment of politicians and their families.
Given the Democrats are in the minority, it remains uncertain if Republicans will incorporate the Democrats’ recommendations when progressing the bill through the Senate banking and agriculture committees. The bill, titled the Responsible Financial Innovation Act, aims for passage by 2026.
Republican Senator Tim Scott, chair of the banking committee, expressed optimism that a significant number of Democrats might support the bill.
Key Highlights of the Democratic Framework:
- Emphasis on combating illicit finance
- Addressing gaps in the spot market for digital assets not classified as securities
- Calls for increased resources for SEC, CFTC, and Treasury Department
- Citing concerns over regulatory leadership and appointments
- Recommendations to restrict elected officials and their families from profiting from digital assets while in office
The framework also criticizes the lack of leadership at the CFTC, currently headed only by acting chair Caroline Pham, with all other commissioner positions vacant. The Senate is poised to consider President Trump’s nominee, Brian Quintenz, as the new chair.
Following the GENIUS Act’s recent passage regulating payment stablecoins, the Senate plans to prioritize the market structure bill after its recess.
Meanwhile, the House has passed the CLARITY Act with bipartisan backing, while an anti-central bank digital currency bill lacked support from most Democrats.
Concerns remain that Trump’s family’s involvement in crypto projects could complicate bipartisan consensus, especially among Democrats cautious about conflicts of interest.
The proposed framework reflects a commitment to strong, clear rules that maintain trust in the digital asset market and protect American investors while encouraging innovation.
