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Highlights
- The draft crypto market structure bill provides a comprehensive regulatory framework for the crypto industry.
- The bill touches on token classification, regulatory oversight, banking, and anti-money laundering guidelines.
- This comes just days after the GENIUS Act became the first major crypto law.
The U.S Senate Banking Committee has released its long-awaited crypto market structure bill, also known as the CLARITY Act. This development comes just days after the GENIUS Act became law. The bill provides a more comprehensive framework for the industry, addressing several key issues, including token classification.
Senate Banking Committee Releases Draft Crypto Market Structure Bill
The U.S Senate Banking Committee, led by Senator Tim Scott, has released the draft CLARITY Act. The bill encompasses all aspects of the crypto industry and offers guidance on how regulators should approach transactions involving digital assets.
Firstly, the draft crypto market structure bill clearly states that digital assets, which it also describes as “ancillary assets,” shall not be a security and that secondary transactions involving them shall not be considered investment transactions. However, a part of the bill also provides instances where digital asset transactions may be investment contracts.
As commodities, the Commodity Futures Trading Commission (CFTC) will play a greater regulatory role alongside the Securities and Exchange Commission (SEC). The bill also mandates that the SEC tailor existing regulations to accommodate crypto activity while continuing to protect investors.
Furthermore, the bill also addresses issues such as banking, disclosures, self-custody, and anti-money laundering guidelines, just as the Senate Banking Committee outlined in the CLARITY Act principles it released earlier.
The crypto market structure draft release comes just days after Donald Trump signed the GENIUS Act into law. As Coinbase CEO Brian Armstrong revealed, the White House has given Congress a September deadline also to pass the CLARITY Act, likely joining the stablecoin bill as the second major crypto law.
Commenting on the bill’s release, pro-crypto Senator Cynthia Lummis, who is also a member of the Banking Committee, declared that the CLARITY Act will serve as the foundation for making the U.S. the crypto of the world.
Banking Committee Issues Request For Information
Following the release of the draft crypto market structure bill, the Senate Banking Committee has also requested for information (RFI) from stakeholders regarding Regulatory Clarity and Tailoring, Investor Protection, Trading Venues and Market Infrastructure, Custody, Illicit Finance, Banking, and Innovation.
Concerning regulatory clarity, the senators ask questions such as whether the proposed legislation should depend on the concept of ancillary assets, and if it does, whether the ‘Howey Test’ should define what digital assets classify as securities.
For trading venues, the Senators inquired about how the crypto market structure bill should address crypto exchanges’ involvement in the trading of digital assets. Furthermore, they asked if the legislation should allow these exchanges to facilitate the trading of crypto commodities and crypto securities on the same platform.
On self-custody, the RFI inquired about what challenges market participants face relating to the custody of digital assets and how the legislation can address them. It also asked if Congress should treat the custody of crypto securities and non-securities differently.
The draft crypto market structure bill already contemplates amending federal banking statutes to explicitly authorize banks to engage in crypto-related activities. In line with this, the senators asked if this measure is necessary and if there is any particular activity they should include besides custody, lending, and payments.
Meanwhile, the RFI inquired how the proposed legislation should address tokens that are issued outside the U.S., which consumers in the country trade and purchase. Lastly, it asked whether the bill should preempt certain state laws and, if so, how it should proceed.
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