This morning at the Blockchain Association's Policy Summit, Senator Cynthia Lummis dropped significant news: the Senate's bipartisan market structure draft will be released by the end of this week, with markup planned for next week.

With the GENIUS Act now law and its rule-making process underway, Washington has turned its attention to the fundamental question that's been hanging over the industry: who regulates what in crypto? 

The answer matters because it determines whether the SEC or CFTC has jurisdiction, what registration requirements apply, and ultimately how digital asset markets can operate in the United States.

After months of negotiations between Senate Banking and Agriculture Committees, the legislative framework that will determine how digital assets are regulated in the United States is finally ready for public review.

Timeline: How We Got Here & What Comes Next

Let’s quickly review how we got here. On July 17, 2025 Digital Asset Market Clarity Act of 2025 (CLARITY Act, now it has to pass the Senate, and after that it goes to the president to be signed into law.

• July 17, 2025: House passes CLARITY Act (H.R. 3633) with bipartisan support, 294-134
• November 10, 2025: Senate Agriculture Committee releases 155-page bipartisan discussion draft on digital commodities and CFTC oversight
• September-December 2025: Senate Banking Committee negotiates bipartisan draft covering SEC jurisdiction (not yet public)
• Last week: First bipartisan member meeting between Senate Democrats and Republicans
• Last night (Mon, Dec. 8): Democrats delivered final asks to Republican staff
• This week: Draft bill to be released by week's end
• Next week: Markup planned
• End of 2025: Senate Banking Chair Tim Scott's goal for committee votes on both bills
• Early 2026: Target for merged Senate floor vote

The Two-Committee Process

The Senate is taking a different approach than the House. Rather than the joint committee process used in the House, the Senate has two separate committees working in parallel.

The Senate Banking Committee handles SEC-facing aspects of market structure: how to define investment contracts, what qualifies as an ancillary asset, and related securities questions. Chair Tim Scott started with Republican-led discussion drafts, most recently the Responsible Financial Innovation Act of 2025, then worked to turn this into a bipartisan product through meetings with crypto-friendly Democrats and industry roundtables.

The Senate Agriculture Committee focuses on digital commodities and CFTC oversight. On November 10, Chair John Boozman and Senator Cory Booker released a 155-page bipartisan discussion draft that builds on the House CLARITY Act but takes a more prescriptive approach to customer protection. It includes tighter proprietary trading limits, detailed conflict-of-interest rules, enhanced retail protections, and would create an Office of the Digital Commodity Retail Advocate at the CFTC.

The two committees communicate extensively to ensure their bills work together, even though they're moving on separate tracks. Once both bills pass committee, they'll be stitched together on the Senate floor as a two-committee product.

Why This Week Matters

The timing is deliberate. With fewer than 10 legislative days left in 2025, Senate leadership wants to move quickly. According to Lummis, their staffs are exhausted after working through weekends and late nights, and it's time to reveal the product, give everyone a chance to review it over the holiday break, and move forward.

The first bipartisan member meeting happened last week and went well. Democrats delivered their final asks to Republican staff last night. Today, Gillibrand, Lummis, and other key senators are meeting to work through remaining issues.

"Industry is getting a little concerned about what's happening behind closed doors," Lummis said. “Our staffs are exhausted. I'm worried about the temperature and the flare, and it's just time to reveal a product."

Both senators were direct: when the draft drops, industry will be on a tight timeline to read it, vet it, and provide feedback. This is prime time for getting this done.

What Makes the Senate Bill Different

The Senate bill tackles issues the House CLARITY Act didn't address. According to Gillibrand, the House didn't have time to bring Democratic negotiators in to add their contributions, so while the House bill was bipartisan in vote count (294-134 in July), it was largely drafted by Republicans.

The Senate version includes substantial new provisions on decentralized finance exchanges and illicit finance. The Agriculture Committee draft explicitly left sections on DeFi and anti-money laundering incomplete, with bracketed language marking areas still under negotiation. These aren't just placeholders. They represent some of the hardest policy questions Congress has to answer.

On DeFi specifically, the challenge is determining what activities should be exempt from intermediary registration with the CFTC. It's complicated by the fact that KYC requirements fall under Banking Committee jurisdiction, so whatever Agriculture produces needs to mesh with Banking's approach even though they're working in parallel.

But the most significant innovation is how the Senate bill handles network tokens.

The Network Token Framework

Gillibrand explained that when she and Lummis started working together four years ago, their draft created a binary choice: tokens were either digital securities or digital commodities. Some would fall in between, and a committee would assess them on a case-by-case basis.

But over those four years, they realized that most network tokens don't fit neatly into either category. They have characteristics of both.

"Most network tokens are offered for sale like a security to raise money for their company, for their idea, for their token," Gillibrand said. "And there's still a board. There's still a CEO. There's still some centralized management. The value of that token still derives from who those people are and how smart they are and how capable they are and what their vision is."

Over time, these projects aim to become fully decentralized and fungible, essentially becoming commodities. But that transition might take one year, three years, or ten years.

"Why should we make them be one thing or the other?" Gillibrand asked. "Let them be what they want to be. Let us regulate their business model based on their function and what they're doing, and write regulation that meets their needs, as opposed to forcing them by label to fit one category or the other under existing law."

The approach acknowledges that this ecosystem is fundamentally different from traditional securities and commodities markets. While a token's ambition might be to become a commodity, during the period when there's still a board, still a CEO, and the project's reputation is still relevant to the token's value, the regulatory framework should reflect that reality.

Lummis credited Gillibrand with developing this framework, noting that one benefit of the long legislative process has been the ability to adapt the bill as the industry itself evolved and changed over four years.

Reconciling House and Senate Approaches

The House and Senate are taking fundamentally different approaches to key definitions. How they classify tokens versus ancillary assets versus commodities differs in material ways.

When GENIUS moved through Congress, the Senate was able to push its approach and the final law reflected mostly Senate priorities. That's unlikely to happen with market structure legislation. The differences here are too significant, and finding middle ground will be necessary.

The Senate Banking Committee has been particularly focused on getting the ancillary asset test right, understanding that a few words in these provisions can have dramatic downstream effects. Senate staffers have been meeting late into the night working through these details, recognizing they get one shot at getting this right.

Coordinating on Multiple Fronts

The negotiations aren't just between Democrats and Republicans. According to Lummis, they're also coordinating with industry and the White House simultaneously.

One key sticking point has been ethics language. Senator Lummis and Senator Ruben Gallego negotiated language and sent it to the White House, which sent it back saying they could do better. Senator Lummis plans to sit down with staffers and rework it, then potentially lobby the White House on two issues: the revised ethics language and advancing Democratic nominees to the CFTC and SEC as a show of good faith.

Democrats are focused on bringing consumer protections and fairness provisions that will apply across the board. Senator Angela Alsobrooks, who recently joined the Banking Committee negotiations, emphasized that Democrats want to make sure people are safe to engage in crypto markets. "People lose millions of dollars in crypto scams last year," she noted. "We want to be able to put forward a product that protects consumers while allowing innovators to enter this space."

Senator Cory Booker, leading negotiations on the Agriculture Committee side, stressed the balance required on DeFi: "We can't criminalize people writing code, for crying out loud. We have got to protect the innovators." At the same time, he acknowledged legitimate national security concerns about illicit finance that need to be addressed.

The "dynamic dozen" Democratic senators working on market structure have been meeting throughout the process. Alsobrooks confirmed they're working together well and have made significant progress on issues that matter to Republicans, while Republicans need to lean in on Democratic priorities. She left a negotiating session in Chairman Scott's office just before speaking this morning, where discussions have been happening in good faith.

Democrats are focused on bringing consumer protections and fairness provisions that will apply across the board. Republicans are focused on innovation and regulatory clarity. The bill is stronger because both sides are contributing.

The Bipartisan Dynamic

Gillibrand and Lummis have been working together on this for four years, sharing staff and meeting constantly. As Gillibrand put it, they were "on an island" when they started, but they share excitement about the industry and agree on almost everything.

The partnership matters because in a place where division dominates the daily news cycle, this bill represents genuine bipartisan coalition-building. It's the first financial services innovation law to come out of the Senate Banking Committee in eight years, and the first significant changes to financial law since the 2008-2009 financial crisis.

Both senators emphasized that this needs to remain nonpartisan. The opportunities the technology creates for the US economy, for access to capital in underbanked communities, and for democratizing finance require regulatory certainty that can only come from durable, bipartisan legislation.

What Happens Next

The Senate needs at least seven Democrats to vote yes, and probably more (60 to 80 votes) to be truly durable.

Behind the scenes, Senate staffers have been clear about what helps: be direct about what works and what doesn't. They need to understand which issues are existential threats to business models versus which are merely uncomfortable preferences. And they need specificity on technical details.

When the draft drops this week, industry will have limited time to review before markup next week. Both senators stressed that this is the moment to set aside time, comb through the bill carefully, and provide detailed feedback quickly.

The timeline is ambitious. If both committees move their bills by year-end and produce a merged Senate bill, we could see a Senate floor vote in Q1 2026. After that comes reconciliation with the House CLARITY Act.

Looking Beyond Market Structure

Assuming market structure passes, tax reform is likely to be next. Lummis has put together a comprehensive tax package for digital assets that Senate Finance has already held hearings on. The House Ways and Means Committee has also embraced the approach.

The strategy makes sense: establish what these assets are under market structure legislation, then figure out how to tax them. In her appearance today at the Blockchain Association's Policy Summit, Lummis predicted this will happen in 2026.

The Bottom Line

After four years of work, the Senate's market structure bill is ready for public review. The draft coming this week will show how the Senate plans to create what Gillibrand called "the best regulatory framework in all jurisdictions worldwide."

The window is narrow, and with fewer than 10 legislative days left in 2025, momentum matters. This is the moment when years of negotiation become actual legislative text that industry can read, assess, and respond to.

As Lummis put it today, "We are at prime time."