The Senate Banking Committee’s latest market structure discussion draft has garnered positive feedback from leaders in the cryptocurrency industry. The 182-page “Responsible Financial Innovation Act of 2025” text, which was released on Friday, is being praised for its comprehensive developer protection language, a feature that experts believe is unparalleled in federal legislation thus far.
Amanda Tuminelli, the executive director and CLO at DeFi Education Fund, commended the draft for its developer protections, describing them as the most robust language she has seen in any legislative proposal to date. Legal expert Gabriel Shapiro also lauded the bill for its improved approach to decentralized governance systems, noting that it effectively addresses concerns surrounding governance tokens potentially violating securities laws.
One key highlight of the legislation is its treatment of decentralized autonomous organizations, particularly blockchain-based governance tokens (BORGs). The bill clarifies the distinction between “disqualifying financial rights” carve-outs for actual securities versus payment and utility tokens. Additionally, the draft provides clarity on decentralized governance, staking mechanisms, airdrops, tokenization processes, and self-custody protections, as well as safeguards for existing tokens against potential SEC enforcement actions.
Colin McLaren emphasized the significance of Democratic support for the legislation, urging Senate Democrats to prioritize innovation over regulatory constraints. He argued that the bill presents an opportunity to foster the development of groundbreaking American startups, rather than prolonging regulatory uncertainty and benefiting legal professionals.
The draft proposes a dual regulatory structure that divides oversight responsibilities between the Securities and Exchange Commission and the Commodity Futures Trading Commission. This framework aims to eliminate jurisdictional ambiguity surrounding digital asset regulation by establishing clear boundaries based on asset classification and functional characteristics. Under this structure, the CFTC would oversee digital commodities, while the SEC would retain jurisdiction over securities and investment contracts related to digital commodities.
The next phase involves the Banking Committee introducing a formal bill and conducting markup proceedings, potentially by the end of the month. The timeline for progression will depend on the response from Democrats and their willingness to negotiate on contentious provisions within the draft legislation.
In conclusion, the “Responsible Financial Innovation Act of 2025” represents a significant step towards enhancing regulatory clarity and fostering innovation within the cryptocurrency industry. As the legislative process unfolds, stakeholders will be closely monitoring developments to assess the potential impact on the sector.