U.S. Lawmakers Introduce Landmark Crypto Market Structure Bill

The bill, which builds on last year’s Financial Innovation and Technology for the 21st Century Act (FIT21), is designed to provide legal certainty around when a digital asset should be treated as a commodity versus a security. This distinction has long been a sticking point for industry participants, who often find themselves caught between inconsistent rulings from the Securities and Exchange Commission and Commodity Futures Trading Commission (CFTC).

Under the proposed legislation, digital assets that meet specific criteria, such as being created by a blockchain system, deriving their value from that system, or granting governance rights in a decentralized protocol, could be treated as “digital commodities.” These would fall under the oversight of the CFTC, while assets more closely resembling investment contracts would remain under the SEC’s jurisdiction.

The draft also introduces a definition for what it calls a “mature blockchain system”, a decentralized network that is open-source, not controlled by a single entity, and where no individual or entity owns more than 20% of the token supply. Assets tied to such systems could more easily qualify as commodities, exempting them from securities laws that have previously ensnared projects in costly legal disputes.

Representative French Hill (R-Ark.), a key figure in drafting the legislation, described the bill as a significant advancement toward establishing regulatory clarity in the crypto sector. He emphasized that the proposed framework is designed to foster innovation while upholding market integrity and safeguarding investors.

However, the bill is already generating partisan controversy. Representative Maxine Waters (D-Calif.), the ranking Democrat on the House Financial Services Committee, has expressed strong opposition, suggesting that Republican lawmakers are pushing legislation that could serve the interests of President Donald Trump’s allies, given his renewed public support for the crypto industry. Reports indicate that Waters is planning to lead a walkout from an upcoming committee hearing in protest, citing concerns over potential conflicts of interest.

The timing of the bill also intersects with an increasingly fractured debate in the Senate over digital asset regulation. A separate proposal, the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, has recently suffered a setback after nine Senate Democrats withdrew their support. That bill, spearheaded by Senator Bill Hagerty (R-Tenn.), was seen as the most promising bipartisan effort to regulate stablecoins, but concerns over potential loopholes and foreign influence have stalled its progress.

The CEOs of the three leading digital asset trade associations have jointly called on the Senate to advance the GENIUS Act, urging lawmakers to bring the bill to the floor for debate this week.

Analysts suggest the House bill could gain momentum given the Trump administration’s stated interest in fostering digital finance innovation. President Trump has expressed support for pro-crypto policies and is expected to highlight blockchain as part of his broader economic modernization agenda heading into the 2026 midterms.

The bill's rollout marks a renewed push by House Republicans to take the lead on digital asset regulation after a year of stalled negotiations and legislative gridlock. It also reflects growing consensus that without a unified federal framework, the U.S. risks ceding leadership in financial innovation to other jurisdictions like the European Union, which has already implemented the comprehensive MiCA (Markets in Crypto-Assets) regulation.

Next steps for the House bill include committee hearings and possible revisions as it advances through the legislative process. Whether it can attract enough bipartisan support remains to be seen, particularly in a polarized political climate where digital assets have become a flashpoint in broader ideological battles.

For now, the introduction of the bill sends a clear message: U.S. lawmakers are no longer content to let crypto regulation be defined through lawsuits and enforcement actions. Instead, they are seeking to lay the foundation for a coherent legal infrastructure that could shape the future of finance.