The U.S. Cryptocurrency Market Structure Act makes "progress" — will it become the biggest benefit this year?

Article by: ChandlerZ, Foresight News

As the Senate version of the Cryptocurrency Market Structure Bill approaches a critical milestone, major stakeholders from Wall Street and the crypto industry held an undisclosed closed-door meeting on January 8, aiming to resolve key disagreements before the Senate’s crucial vote next week. Sources indicate that progress was made on DeFi issues.

The current core disagreement centers on Wall Street industry groups like SIFMA opposing the bill’s proposed regulatory exemptions for certain DeFi services and their developers; crypto policy advocates (including representatives related to a16z and the DeFi Education Fund) urged SIFMA to lower their demands, as some of their requests have already been incorporated into discussions by pro-crypto Senate Democrats. Another point of contention is interest-bearing USD stablecoins; sources say SIFMA and banking lobbying groups want to push for retroactive bans, but SIFMA has denied having a clear stance on this in the media.

The urgency of negotiations stems from the fact that the Senate Banking Committee and Agriculture Committee (which oversees the CFTC) both plan to hold hearings and votes on crypto market structure legislation on January 15, marking significant progress after months of negotiations over the past year. If the bills are approved by both committees, they will proceed to internal Senate coordination and integration with the “Digital Asset Market Clarity Act,” which has already passed the House, ultimately to be signed into law by President Trump.

Industry experts generally believe that if this milestone cannot garner bipartisan support, the bill will face difficulty in reaching a full Senate vote and final passage.

Crypto Market Structure Bill

The so-called Cryptocurrency Market Structure Bill essentially aims to establish a set of foundational rules similar to those in traditional financial markets for digital assets. In asset classification, it seeks to clarify which tokens are more like securities and which are more like commodities (or other categories); in regulatory division, it aims to define the boundaries of SEC and CFTC authority; in market infrastructure, it proposes registration and compliance obligations for trading platforms, brokers, dealers, custodians, and other intermediaries to prevent the industry from remaining in a state of regulatory uncertainty reliant on enforcement and litigation. The House’s CLARITY Act exemplifies this approach, aiming to establish clear division of responsibilities between SEC and CFTC and a registration mechanism for digital asset institutions serving clients.

In recent years, U.S. Congress has divided crypto legislation into two tracks: the GENIUS Act, which sets rules for payment stablecoins—including issuance, reserves, disclosures, redemptions, and compliance—effectively laying the groundwork for the digital cash track of USD stablecoins; and the broader Market Structure Bill (represented by the CLARITY Act), which focuses on a wider market framework, establishing federal registration and regulation.

Particularly, longstanding disputes between SEC and CFTC over digital asset regulatory authority have led to unclear compliance boundaries and unstable regulatory expectations, seen as significant hidden costs suppressing innovation in the U.S.; once enacted, the Crypto Market Structure Bill would clarify responsibilities through legislation, with CFTC primarily overseeing secondary market trading and market order for digital commodities, and SEC focusing on primary issuance, private placements, and related disclosures for tokens with securities attributes, significantly enhancing regulatory certainty and rule predictability.

If such legislation passes, the main market significance lies in greatly increased regulatory clarity. Exchanges, custodians, brokers, and project teams will find it easier to know who is responsible and what requirements they must meet; traditional financial institutions will also find it easier to enter and provide services under clear rules, promoting a more regulated and predictable market.

Investment Bank Analysis: Crypto Market Structure Bill May Be Delayed Until 2027

Tim Scott, Chairman of the U.S. Senate Banking Committee, previously stated that negotiations show that parties have yet to reach consensus on four key areas, including:

DeFi: Decentralized Finance (DeFi) should be subject to the same federal regulation as financial institutions, but its basic definition and issues remain unresolved.

Stablecoin yields: The GENIUS Act prohibits stablecoin issuers from offering interest, though related companies can provide yields and customer reward programs. The banking industry sees this as potentially threatening core deposit business, and some Democrats also want to restrict crypto yields.

Morality: Regulations prohibit senior U.S. government officials from deriving personal benefits from crypto activities.

CFTC: The U.S. Commodity Futures Trading Commission (CFTC) will play a leading role in crypto regulation, but the allocation of seats between the two major U.S. political parties within the CFTC needs to be balanced.

The Washington research team at TD Cowen believes that while there is a theoretical path to push forward and pass legislation this year, a more realistic outcome might be delaying legislation until 2027, with the final rules possibly not taking effect until 2029.

This “dragging out” timeline is primarily driven by political interests rather than technical language. TD Cowen suggests that Democrats may lack motivation to accelerate this year, as they might see an opportunity to regain control of the House or expand influence in the 2026 midterm elections. Delaying negotiations could serve as leverage post-election and might also shift subsequent regulatory rulemaking authority more toward Democrats. The report also notes that staff have been working on technical language for several months, so the delay is more about political decision-making than drafting.

The biggest point of contention is the conflict of interest clause. Democrats are likely to insist on restrictions that prohibit senior government officials and their families from participating in or holding interests in crypto-related businesses. Such clauses would directly affect Trump and his family’s interests, making it a non-starter for Trump, according to TD Cowen. A possible compromise is to delay the enforcement of the conflict of interest clause—for example, making it effective three years after legislation passes—so it would not apply to Trump. However, Democrats might not accept just delaying this clause; they could demand that the entire bill’s enactment and implementation be postponed, leading to a scenario where the bill passes in 2027 and is implemented in 2029.

Another practical obstacle is the procedural threshold in the Senate. Overcoming filibuster typically requires 60 votes, meaning even if Republicans are unified, they still need to secure support from some Democrats; in practice, the Republican caucus may not be entirely united, so more Democratic votes might be needed. This gives Democrats leverage to slow down the bill and use key provisions and implementation timelines as bargaining chips.