The cryptocurrency capitalization exceeded $3 trillion in 2025, reflecting strong growth despite regulatory gaps. The Senate Agriculture Committee's bipartisan draft, released November 10, addresses these issues by clarifying oversight for digital commodities. This step promotes stability in funding and adoption across sectors.
Draft Background
Senators John Boozman and Cory Booker introduced the draft to establish a framework for crypto market structure. It builds on prior bills like the Clarity Act, focusing on regulation and security.
This initiative responds to industry needs for clear rules in CeFi and DeFi, aiding technology integration.
Core Definitions
A digital commodity includes fungible blockchain assets transferable peer-to-peer without intermediaries. It excludes securities, stablecoins, and non-fungible items like NFTs.
This classification supports Web3 technologies while carving out metaverse virtual lands as collectibles.
Jurisdiction and Framework
The CFTC gains exclusive authority over digital commodity spot markets, mandating registration for exchanges and brokers. Joint SEC-CFTC rulemaking handles overlaps in mixed transactions.
Such measures enhance security through anti-manipulation standards and foster adoption.
DeFi and Web3 Impacts
DeFi protocols qualify for exemptions if decentralized and non-custodial, boosting innovation in Web3. Developers avoid money transmitter status under certain conditions.
Amanda Tuminelli from DeFi Education Fund hopes for strong protections in the final DeFi section.
Customer Safeguards
Exchanges must segregate customer funds in qualified custodians, prohibiting commingling. This bolsters security in CeFi operations.
Individuals retain self-custody rights for peer-to-peer transactions, excluding institutional or sanctioned activities.
Funding and adoption Effects
The draft imposes fees on registered entities to fund CFTC oversight, ensuring robust regulation. Clear rules could drive institutional funding into the market.
Juan Leon of Bitwise predicts a massive influx of capital to regulated assets, accelerating adoption.
Security and Regulation Focus
Core principles require exchanges to monitor trading and implement cybersecurity safeguards. This addresses vulnerabilities in technology-driven sectors.
Cody Carbone from Digital Chamber emphasizes expanded CFTC authority over the industry.
Challenges Ahead
Sections on anti-money laundering and DeFi remain blank, signaling ongoing debates. The bill may merge with other proposals by 2026.
It aims to balance innovation with oversight in uncategorized areas like NFTs and metaverse.
This draft holds key relevance for the crypto ecosystem's future. It provides a pathway for secure growth, influencing funding, adoption, and regulation across diverse sectors.
