The Senate Agriculture Committee just released a bipartisan draft bill that could fundamentally reshape crypto regulation in America. The legislation classifies bitcoin and ether as digital commodities under CFTC oversight, potentially unlocking billions in institutional investment while forcing crypto exchanges to overhaul their business models. It's the most concrete regulatory roadmap the industry has seen yet.
The crypto industry just got its clearest regulatory roadmap yet. The Senate Agriculture Committee dropped a bipartisan discussion draft Monday that could unlock institutional billions by giving bitcoin and ether the regulatory clarity Wall Street has been demanding. Agriculture Chair John Boozman (R-Ark.) and Sen. Cory Booker (D-N.J.) unveiled legislation that fundamentally restructures how America regulates digital assets. The bill classifies major cryptocurrencies like bitcoin and ether as 'digital commodities,' placing them squarely under the Commodity Futures Trading Commission's oversight rather than the SEC's historically aggressive approach. 'This is the most consequential roadmap for how an institution is going to integrate digital assets into their business,' Cody Carbone, CEO of crypto trade association Digital Chamber, told CNBC. The commodity classification removes what Juan Leon, an analyst at crypto-focused Bitwise, calls a 'major blocker' for institutional adoption. 'Compliance and risk departments will finally have a federal statute to point to,' Leon explained to CNBC. That legal certainty could trigger what Leon predicts will be 'a massive influx of institutional capital, deep liquidity and a robust derivatives ecosystem' for regulated tokens. But the bill doesn't just grant favorable status - it demands structural changes that could upend crypto's freewheeling culture. The draft requires crypto firms to 'establish governance, personnel, and financial resource separation among affiliated entities that perform distinct regulated functions.' Translation: the days of crypto exchanges operating as jack-of-all-trades entities are numbered. Leon sees this provision challenging the 'all-in-one' business model common among crypto platforms, where exchange, broker, custodian, and proprietary trading operations all operate under one roof. Instead, digital asset firms would need to separate their businesses like traditional Wall Street firms - a change Leon calls 'a foundational pillar for institutional adoption.' The regulatory shift also represents a power transfer from the SEC to the CFTC. For years, the SEC muscled its way into crypto oversight, launching enforcement actions against major players like and . This bill flips that script, giving the CFTC joint rulemaking authority with the SEC and allowing it to collect fees from regulated entities. Those fees would fund exchange registration, broker oversight, and industry education - essentially building the CFTC's crypto enforcement infrastructure from the ground up. The draft also tackles one of crypto's persistent problems: market manipulation and scams. It requires exchanges to only list digital commodities 'not readily susceptible to manipulation,' potentially reducing rug pulls and other fraudulent schemes that have plagued the industry. This provision aims to build institutional confidence by establishing baseline listing standards. The timeline, however, remains aggressive. Carbone warns it may be 'almost impossible to get a final version done by the end of the year,' as lawmakers will spend weeks gathering industry feedback. Key details remain bracketed in the draft, including anti-money laundering rules and regulations for decentralized finance protocols. 'We've long said crypto is a bipartisan issue, and this draft from Chairman Boozman and Senator Booker reflects that,' President Keith Grossman told . 'It's critical that legislation distinguishes between centralized intermediaries and decentralized systems.' The Agriculture Committee draft represents just one piece of a larger legislative puzzle. The text will eventually merge with the Senate Banking Committee's portion to create comprehensive crypto legislation. Meanwhile, Chief Legal Officer Craig Salm notes that regulatory progress continues even without final legislation. The SEC, IRS, and Treasury have recently provided guidance on crypto staking in exchange-traded products, building momentum for broader regulatory acceptance.
