Main obstacles facing the Crypto market structure bill: The Senate Agriculture Committee proposes a new version seeking a breakthrough

After a lengthy policy discussion, the U.S. Senate Agriculture Committee recently introduced a new version of the Cryptocurrency Market Structure Act, aiming to clear major hurdles on the road to this highly anticipated regulatory framework. The emergence of this new proposal marks the culmination of years of lobbying and negotiations, finally providing a new opportunity to advance the bill.

New Developments: Senate Agriculture Committee’s Involvement

On Wednesday evening, the Senate Agriculture Committee released its drafted version of the Crypto Market Structure Act and plans to hold a hearing next Tuesday. This move responds directly to the controversy sparked by the previous version from the Senate Banking Committee. The earlier banking committee version, due to its sensitive content, led to the last-minute postponement of a scheduled hearing last week, reflecting deep internal divisions within the crypto regulatory space.

Committee Chair John Bozeman stated in a release that he values collaboration with Democratic Senator Cory Booker and his team, emphasizing that the committee is pushing forward consumer protection while considering granting new powers to the Commodity Futures Trading Commission (CFTC). He noted that although there are still differences on some key policy issues, this bill is based on a bipartisan draft that incorporates feedback from multiple stakeholders, representing months of work.

Core Hurdle: Bipartisan Consensus Difficulties

The biggest obstacle facing the Crypto Market Structure Bill is securing broad support from both parties. While industry players hope for bipartisan cooperation, the process appears to be advancing under a Republican-led framework. Democrats need to push for amendments during the hearing stage before the final vote, but this window may be narrow.

Another hurdle arises from the coordination between two different committee versions. After the Agriculture and Banking Committees each introduced their respective bills, these versions must be merged before the full Senate vote. During this process, Democrats need at least seven votes to move the bill forward to the House of Representatives. The current political climate suggests that even passing the bill in the House will not be easy.

Substantive Content and Regulatory Framework of the Bill

The version from the Agriculture Committee reflects a stance relatively inclined toward Republicans and pro-crypto interests. It maintains legal protections for developers—so long as they do not control customer assets—while enhancing the role of the CFTC in spot market regulation, especially for tokens like Bitcoin that are not classified as securities.

However, this version omits some more controversial issues that arguably fall under the jurisdiction of the Banking Committee, such as stablecoin yield concerns and illegal financing risks. This division of responsibilities reflects differing priorities among regulatory agencies regarding various aspects of the crypto ecosystem.

Industry Concerns and Focus

Another significant hurdle for the crypto industry is the regulatory framework for decentralized finance (DeFi). Democrats worry whether DeFi platforms can adequately protect consumers, while the security industry advocates for applying similar regulatory standards to DeFi companies as traditional financial firms. However, DeFi proponents argue such approaches are impractical, given the decentralized nature of DeFi protocols, making traditional regulation nearly impossible to enforce.

Additionally, Democrats have expressed concerns over administrative appointments. They are uneasy about personnel choices made by the Trump administration within agencies like the CFTC and SEC, fearing conflicts between crypto interests and the independence of regulatory bodies. Some Democratic lawmakers have proposed establishing an ethics ban to prevent senior federal officials, such as Trump appointees, from profiting from crypto investments.

Ongoing Challenges for the Banking Committee

The Senate Banking Committee’s version faces more hurdles. A key point of contention is whether stablecoins can offer rewards to consumers, with banking lobbies claiming this threatens traditional deposit-taking. Coinbase withdrew support just hours before the hearing over this issue, highlighting the sensitivity of advancing the bill.

Chair Bozeman is committed to seeking bipartisan agreement within the committee, but ongoing pressure from the banking industry makes this process more challenging than the progress seen in the Agriculture Committee.

Outlook and Opportunities

Despite these hurdles, the Crypto Market Structure Bill continues to move forward. If the Agriculture Committee completes markup by January 27, it will mark the first significant progress after years of industry lobbying. This would also be a major breakthrough at the Senate level following the House’s passage of a similar “Digital Asset Market Clarity Act” last year.

The Trump administration’s statement at the Davos Forum that the U.S. is about to establish comprehensive crypto regulations has boosted market confidence. Industry expert Patrick Witt posted on social platform X that, “This is a question of when, not if. It’s pure fantasy to think a multi-trillion-dollar industry can operate without a comprehensive regulatory framework.”

However, each breakthrough requires balancing political will and industry strength. The new version from the Agriculture Committee seeks this balance—aiming to meet industry demands for clear regulation while addressing consumer protection and financial safety concerns.

Related Developments: Regulatory Guidelines for Tokenized Securities

Meanwhile, the U.S. Securities and Exchange Commission (SEC) has issued new guidelines clarifying that tokenized stocks are subject to existing securities and derivatives regulations, regardless of whether they are traded on a blockchain. The guidelines distinguish between issuer-sponsored tokenized securities (which may represent actual equity ownership) and third-party products (which typically offer synthetic exposure or custody rights).

Regulators state their goal is to prevent the spread of synthetic equity products to retail investors while encouraging tokenized structures that are fully controlled and approved by issuers. This policy aligns with the overall approach of the Crypto Market Structure Bill, both seeking to balance innovation with investor protection.

The development of the entire crypto regulatory framework fundamentally involves overcoming a series of hurdles, finding sustainable pathways between industry growth and risk management. While the new version from the Agriculture Committee is not the final answer, it represents an important step in this direction.