How will the crypto legislation bill impact the crypto markets on January 15th? Let's find out what can happen to crypto in a few days!
Institutions care about rules. Developers care about certainty. You, as an investor, should care about both. Ignoring regulation doesn’t make it irrelevant. It just removes your advantage. You don’t need fear. You need context. And context turns noise into strategy. This crypto bill should give this context.
The Senate “crypto market-structure” bill is what we’re talking about. This is also known as the Senate crypto market structure draft. Senators Gillibrand and Lummis are the driving forces behind this. It is interesting that they represent both parties. Gillibrand is a Democrat from New York. Lummis is a Republican from Wyoming. Bipartisan efforts are paving the way. US politics could use a lot more of this.
We’re not talking about one specific bill here. This is a sweeping bill that introduces major, wide-ranging changes. I will get to that in a moment what these bills are.
Initially there was talk of passing this bill before Christmas. However, that was counting outside of reality. The Senate was on leave, and this wasn’t relevant enough to reassemble. Nonetheless, the bill is back on track, and a new date is set for January 15th. See the picture below.
Source: Banking Senate
In mid-December, both Senator Gillibrand and Lummis attended the Blockchain Association Policy Summit in Washington. There, they both said that a full draft was coming that week. That draft is now available and instead was released today.
Now, this bill will be very positive for the crypto market. It’s intended to create a comprehensive regulatory framework for digital assets.
For example, it decides which regulator oversees which type of crypto products. Both the SEC and the Commodity Futures Trading Commission are in play for this. However, in the latest twist, the bill is looking to sideline the SEC in relation to crypto. This is massive news and has the potential to change the whole playing field.
This bill also addresses various other crypto bottlenecks. Like,
The draft aims to go beyond earlier bills like the Clarity Act. This draft is being developed via a two-committee approach:
So, there’s a lot at stake here. Such a bill will have wide-ranging implications for crypto regulation. So, first, let’s take a look at what kind of bills we’re looking at.
Before we look at what this draft covers, let’s first see which bills have already passed. We have, for instance,
Its full name is the Generating E-Currency Now and Ensuring Usage Act. This is the first U.S. federal law regulating payment stablecoins. It creates a framework for private digital currencies by establishing rules for,
All this aims to bring stability and clarity to the growing digital asset market. However, this is stablecoin-specific. It doesn’t cover the broader category of crypto. That’s where Lummis and Gillibrand come into the picture.
For instance, the House already passed the CLARITY Act. It’s now up in the Senate and is under consideration and negotiation. So, here’s what this act is about.
Its real name is the Digital Asset Market Clarity Act. This is a U.S. House bill. It aims to create a clear regulatory framework for digital assets. It divides them into digital commodities, investment contracts (securities), and permitted payment stablecoins. Thus, it grants the CFTC authority over commodities and the SEC over securities. It defines a digital commodity by its value being tied to its blockchain network. At the same time, it excludes securities and stablecoins. It aims to boost U.S. innovation by providing clear rules.
However, what Lummis and Gillibrand are pushing goes well beyond the Clarity Act. This act gives clarity to coins and assets. The Lummis and Gillibrand Act is a broader “market-structure” bill. It covers the full crypto ecosystem. This draft explicitly builds off CLARITY. However, it expands its scope. It would codify CFTC authority over digital commodities, like,
So, the Lummis-Gillibrand version isn’t just about giving clarity to coins and assets, as CLARITY does. It’s about how the entire U.S. crypto ecosystem will be regulated. This includes exchanges, stablecoins, DeFi, token classification, compliance, and more.
That means bigger regulatory impact, more stakeholders, and potentially more debate. But also, a more comprehensive and durable legal framework. And there is the issue at hand. More debate. Will Lummis-Gillibrand be able to push this through before the Christmas recess?
On January 15th we can expect a markup hearing. This is the action phase where a bill is actually shaped and edited. This follows the information-gathering in hearings. It is the first formal committee vote on the bill’s language. The committee needs to approve this before it can go to the Senate floor for a vote. So, this bill aims to resolve the years-long SEC–CFTC jurisdictional conflict.
With this latest update, the SEC might get sidelined. It gives the CFTC exclusive jurisdiction over two important features in digital commodities:
This indicates a big shift. It will decrease the influence of the SEC over crypto markets. That’s because if a token qualifies as a digital commodity under the law, it now falls under the CFTC. So, anybody handling trade execution would register with and primarily answer to the CFTC. Currently, the SEC handles this. That’s a big shift for trading venues, brokers, and dealers.
Democrat Senator Mark Warner and Republican Senator Bernie Moreno were critical of the bill. They are looking for careful drafting and oversight. They’re not against the bill; however, they will not support a poorly designed bill.
There’s also a high procedural complexity. To pass, the bill needs to clear multiple committees. Like the Banking, Agriculture, and possibly more committees. It also needs to reconcile conflicting House and Senate versions. Finally, it needs to secure a White House sign-off.
If this passes, it will give the crypto markets a well-deserved boost. However, we’re looking at a 4- to 6-week window at best before this bill gets to the final Senate vote. A realistic scenario is 2 to 4 months.
What do you think is a realistic time frame for this bill? Let me know in the comments, and make sure to follow us on X and Discord.
Disclaimer
The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment, and informational purposes only. Any information or strategies are thoughts and opinions relevant to accepted levels of risk tolerance of the writer/reviewers, and their risk tolerance may be different from yours.
We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments, so please do your due diligence.
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BTCBREAKING: THE U.S. SENATE JUST SUBMITTED A BILL TO KEEP THE SEC OUT OF CRYPTO. 🇺🇸 IF THIS PASSES, THE ENTIRE PLAYING FIELD CHANGES OVERNIGHT.
🚨NEW: At @moonpay’s New York office today, Senator @MarkWarner told me that getting a crypto market structure markup done before Christmas break will be “very hard” because they are still waiting on White House language for two major pieces of the bill: ethics and quorum. “At Show more
