US Crypto Bill Explodes in Senate: SEC vs CFTC Power Shift Could Redraw the Entire Market

 

US Senate Moves Closer to Landmark Crypto Market Structure Bill as Political Pressure Intensifies

The United States Senate is edging closer to passing what could become the most consequential crypto market structure legislation in the country’s history. Behind closed doors, Senate Democrats have reportedly intensified negotiations, with Majority Leader Chuck Schumer signaling urgency to move the bill forward amid mounting political and industry pressure.

The proposed legislation is designed to bring long-awaited clarity to the regulation of digital assets. At its core, the bill seeks to define which crypto assets fall under securities law and which qualify as commodities, formally dividing regulatory authority between the Securities and Exchange Commission and the Commodity Futures Trading Commission.

For an industry that has spent years operating under legal ambiguity, the bill represents a potential turning point. Yet despite momentum in Washington, political friction, lobbying power, and unresolved disputes continue to threaten its final passage.

A Market Structure Bill Years in the Making

US lawmakers have debated crypto regulation for nearly a decade, but progress has often stalled due to partisan disagreement and regulatory turf wars. The current bill, however, is broader in scope and ambition than previous efforts, closely resembling earlier frameworks such as FIT21 while incorporating lessons learned from market failures and enforcement actions.

Under the proposed structure, crypto assets deemed sufficiently decentralized would fall under CFTC oversight, while tokens that meet the criteria of investment contracts would remain under SEC jurisdiction. Lawmakers argue that this dual-agency approach offers a more balanced system, providing investor protection without suffocating innovation.

Supporters of the bill believe it could finally end the practice of regulation by enforcement, which has drawn criticism from crypto firms and investors alike. By establishing clear definitions and compliance pathways, the legislation aims to reduce uncertainty that has driven innovation offshore.

Schumer Pushes for Momentum Behind Closed Doors

Reports indicate that Chuck Schumer has taken a more active role in advancing the bill, urging Democratic senators to align on key provisions. The closed-door meetings suggest leadership is aware that time is a critical factor, especially as election season approaches and legislative calendars tighten.

Schumer’s interest reflects a broader recognition within the Democratic Party that crypto policy can no longer be sidelined. With millions of Americans now holding digital assets, lawmakers face increasing pressure to provide regulatory clarity rather than prolonged ambiguity.

Insiders say Senate leadership is attempting to strike a delicate balance between consumer protection, financial stability, and economic competitiveness. Failure to act could leave the US trailing other jurisdictions that have already implemented comprehensive crypto frameworks.

Crypto PACs Emerge as a Political Force

One of the most striking developments surrounding the bill is the growing political influence of crypto-backed political action committees. Chief among them is Fairshake PAC, which has rapidly expanded its financial war chest ahead of upcoming elections.

As of early 2026, Fairshake PAC has reportedly raised $193 million, up from $190 million just weeks earlier. That figure rivals fundraising efforts historically associated with powerful industries such as oil, gas, and energy.

The scale of these contributions underscores a shift in how the crypto industry engages with Washington. Rather than relying solely on lobbying firms, crypto companies are now directly shaping electoral outcomes by backing candidates perceived as supportive of innovation-friendly regulation.

Political analysts note that this level of funding grants the industry a seat at the table it previously lacked. As a result, lawmakers on both sides of the aisle are paying closer attention to crypto-related issues, including market structure, taxation, and stablecoin oversight.

Lobbying Power Meets Legislative Reality

While crypto PACs have gained influence, money alone cannot resolve the bill’s remaining challenges. Several contentious issues continue to complicate negotiations, particularly those tied to political optics and financial system stability.

One major hurdle involves disputes surrounding President Donald Trump and his alleged connections to World Liberty Financial. Lawmakers from both parties have raised concerns about conflicts of interest, arguing that unresolved questions could undermine public trust in the legislation.

These disputes have injected political tension into what was intended to be a largely technical regulatory bill. Some senators fear that passing crypto legislation without addressing these concerns could expose them to criticism during the campaign season.

Stablecoin Yields Spark Banking Resistance

Another major sticking point centers on stablecoin yields and competition with traditional banking products. Several large banks have reportedly expressed opposition to crypto firms offering high-yield products that resemble savings accounts.

In particular, offerings from Coinbase advertising annual yields between 3.5% and 5% have drawn scrutiny. Banking institutions argue that such products blur the line between regulated deposits and crypto-based financial instruments, raising concerns over consumer protection and systemic risk.

These objections have triggered ongoing discussions involving the White House, banking regulators, and crypto firms. With a February deadline reportedly looming, negotiators are under pressure to find a compromise that preserves innovation without destabilizing traditional financial markets.

Source: Xpost

Why the SEC-CFTC Split Matters

The proposed division of authority between the SEC and CFTC is widely seen as the bill’s most consequential feature. For years, overlapping jurisdiction and unclear definitions have left crypto firms uncertain about which rules apply to their products.

By assigning commodities-like digital assets to the CFTC and securities-like tokens to the SEC, lawmakers hope to reduce regulatory overlap and enforcement confusion. Supporters argue this clarity could encourage compliance, attract institutional investment, and bring more crypto activity onshore.

Critics, however, warn that coordination between the two agencies will be critical. Without clear communication and unified standards, the split could create new inefficiencies rather than resolving existing ones.

Market Implications for US Crypto Firms

If enacted, the bill could significantly reshape the US crypto landscape. Clear regulatory boundaries may encourage exchanges, custodians, and asset managers to expand operations domestically rather than seeking friendlier jurisdictions abroad.

Institutional investors, long hesitant due to legal uncertainty, may also increase exposure to digital assets under a clearer regulatory regime. This could deepen liquidity, improve market stability, and accelerate the integration of crypto into traditional finance.

At the same time, compliance costs are expected to rise. Smaller firms may struggle to meet new regulatory requirements, potentially leading to consolidation within the industry.

Political Power and the Future of Crypto Regulation

The rise of crypto PACs like Fairshake signals that digital assets are no longer a niche political issue. As campaign contributions grow, lawmakers may increasingly view crypto policy through an electoral lens rather than purely a regulatory one.

This dynamic raises questions about the long-term influence of industry money on financial regulation. While supporters argue that engagement is necessary to counterbalance outdated narratives, critics warn of regulatory capture.

Regardless, the growing political footprint of crypto firms suggests that future legislation will be shaped not only by regulators and economists, but also by campaign strategy and voter sentiment.

What Happens Next

Despite unresolved disputes, Senate leadership appears determined to push the bill forward. Insiders say negotiations are focused on narrow fixes rather than sweeping changes, indicating a desire to preserve momentum.

Whether lawmakers can resolve concerns related to Trump-linked ventures, stablecoin yields, and banking opposition will determine the bill’s fate. Failure to reach consensus could delay comprehensive crypto regulation for years.

For now, the crypto industry, investors, and global markets are watching closely. The outcome of this legislation is likely to define the trajectory of US crypto regulation and influence how digital assets evolve within the world’s largest financial system.

A Defining Moment for US Crypto Policy

If passed, the bill would mark a historic shift in how the United States approaches digital assets. It could transform crypto from a regulatory gray area into a formally recognized component of the financial system.

For lawmakers, the challenge lies in crafting rules that protect consumers without stifling innovation. For the crypto industry, the stakes could not be higher.

As political pressure mounts and lobbying power intensifies, the coming weeks may determine whether the US embraces a structured crypto future or continues to navigate uncertainty in one of the most transformative financial sectors of the modern era.

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