Senate Crypto Legislation Stalls Amid Disagreements on DeFi Oversight as Lawmakers Remain Split on Potential Risks

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Senate Crypto Legislation Stalls Amid Disagreements on DeFi Oversight as Lawmakers Remain Split on Potential Risks

Bitget-RWA2025/11/20 22:44

By:Bitget-RWA

- U.S. Senate Banking Committee plans to vote by December 2025 on a crypto bill designating Bitcoin and Ether as CFTC-regulated commodities, resolving SEC-CFTC jurisdiction disputes. - Bipartisan negotiations face DeFi regulation clashes: Democrats warn of money laundering risks, Republicans oppose banning Trump's crypto business ties. - Proposed measures include customer asset segregation and enhanced disclosures, while Brookings Institution advocates merging SEC/CFTC for unified oversight. - Market urgen

According to committee Chair Tim Scott, the U.S. Senate Banking Committee is preparing to hold a vote on a significant cryptocurrency market structure bill by December 2025, marking a major move toward federal regulation of digital assets. The proposed law, which

classifies Bitcoin and Ether as commodities

under the oversight of the Commodity Futures Trading Commission (CFTC), is designed to settle the ongoing jurisdictional conflict between the SEC and CFTC. It also introduces new requirements for exchanges to minimize conflicts of interest and protect customer assets. Should the bill pass, it would proceed to the full Senate in early 2026, with President Donald Trump

anticipated to approve it

, positioning the U.S. as a leading center for cryptocurrency.

The current draft features provisions for separating customer holdings, requiring greater transparency, and

tackling weaknesses revealed

by previous exchange failures such as FTX. Nonetheless, bipartisan talks remain difficult, especially regarding the regulation of decentralized finance (DeFi). Democratic senators, including Sen. Elizabeth Warren,

have expressed worries

about the risks of money laundering and broader instability associated with DeFi systems, while Republican versions have opposed restricting Trump’s connections to crypto businesses.

Senate Crypto Legislation Stalls Amid Disagreements on DeFi Oversight as Lawmakers Remain Split on Potential Risks image 0

The enactment of this bill would represent a major transformation for the crypto industry, coinciding with a rise in institutional involvement and the introduction of exchange-traded funds (ETFs). At the same time, the Senate Agriculture Committee is working on its own version of the legislation, though

shortcomings in its approach

have attracted criticism from industry advocates.

Other regulatory ideas are also gaining momentum.

Research from the Brookings Institution

suggests that combining the SEC and CFTC would establish a single regulatory system for digital assets, simplifying oversight as the tokenization of traditional financial products accelerates. The analysis

points out flaws in current legislative proposals

due to their complexity and the potential for regulatory loopholes, arguing that a unified agency could better respond to the changing market.

Recent market activity highlights the need for regulatory certainty.

Bitcoin Munari, a project built on Solana

, showcasing ongoing advancements in crypto infrastructure. Meanwhile, the CFTC

revealed intentions

to permit spot crypto trading on approved platforms by the end of the year, supporting broader initiatives to enhance consumer protections.

As the Senate moves quickly to complete its legislation, opinions remain split. Supporters highlight the importance of fostering innovation, while opponents caution that gaps in the law could heighten financial dangers. With Trump’s likely endorsement and increasing pressure from both regulators and the industry, the results of the December vote could reshape the landscape for digital assets in the U.S.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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