Senate Targets Regulation of Stock Tokenization in New Crypto Legislation Draft

The Senate is working towards finalizing its version of regulatory measures for the crypto sector, moving another step ahead in the process.

On Friday, senators introduced a revised draft of a significant market structure bill. This update includes a clause aimed at preventing stocks and similar securities from being classified as commodities if they have been tokenized into digital assets or cryptocurrencies.

Senator Cynthia Lummis, a Republican from Wyoming, expressed hopes to have the bill ready for the president’s approval by the end of the year, as shared during a CNBC interview on Thursday.

Earlier in the summer, both the House and Senate had approved a major legislative bill, which received the President’s signature in July.

For numerous crypto firms, such as Coinbase and Ripple, the market structure bill represents the main objective.

Although the House passed its version of the bill in July, the Senate is crafting a separate variant. Eventually, these two versions must be merged to advance to the President.

The Senate's draft aims to establish guidelines for when digital assets should be categorized as securities as opposed to commodities.

Lummis anticipates a vote this month by the Senate Banking Committee on the sections relating to the Securities and Exchange Commission. Furthermore, she expects the Senate Agriculture Committee to cast their votes in October regarding the Commodity Futures Trading Commission segment.

According to Lummis, a Senate floor vote could potentially occur by November.

The draft has yet to secure backing from Senate Democrats. However, Lummis indicated that bipartisan negotiations are ongoing.

Lummis mentioned, "Efforts are being made to align Democrats and Republicans on certain aspects of the bill to ensure substantial bipartisan consensus on pivotal issues."

Even if every Republican supports the proposal, a minimum of seven Democrats would be required to join their ranks for the bill to pass.

The Senate Banking Committee’s spokesperson noted that the draft represents input from numerous stakeholders addressing various queries.