The US Senate is set to take up broad digital asset market structure legislation next week, with a vote expected on Thursday, according to Senator Tim Scott. The House bill, known as the Digital Asset Market Clarity Act, has received a Senate counterpart, which they call the Responsible Financial Innovation Act, to create a single regulatory system for the industry. The House members supported this bill when they voted on it in July 2025. If the Senate approves it without changes, it would not need to return to the House and could go to President Donald Trump for final approval, according to Senator Scott’s comments to Breitbart News. The cryptocurrency industry holds opposing views about DeFi regulatory systems and sanctions because market instability results from the prolonged period of delayed regulatory implementation. What the Senate will debate “Next Thursday, we’ll have a vote on market structure,” Senator Scott said, adding it is important for lawmakers to “get on the record and vote.” The committee members made different draft versions available to the public throughout their six-month period. The timeline matches the December statements made by White House AI and crypto czar David Sacks, who announced that the Senate would start its markup process in January. Key sticking points and proposed changes The market sector faces multiple ongoing problems, which industry experts who monitor this sector have identified. Crypto lawyer Gabriel Shapiro said the US is “probably going to get a crypto market structure bill,” while cautioning that concerns over illicit finance still need to be addressed. Galaxy Digital’s Alex Thorn said after a bipartisan Senate meeting that it is “unclear if the two sides can come together” because “plenty of issues are still outstanding.” According to Thorn, Democrats want DeFi front-ends to comply with sanctions so interfaces can block illegal transactions, and they want the Treasury’s Office of Foreign Assets Control to have “special measures” to act against entities involved in illicit activity. Castle Island Ventures’ Nic Carter said those requests are “actually pretty reasonable. ” The political situation creates obstacles that block our way forward. The investment bank TD Cowen predicts that the initiative will experience declining progress because of the upcoming 2026 midterm elections. The research indicates that the bill will pass through Congress in 2027 before it starts its full operation in 2029. TD Cowen said Senate Democrats may hesitate to back the measure ahead of elections that could shift control of Congress, which currently tilts Republican. The bank stated that election outcomes remain uncertain because Democrats could decide to establish a political agreement. The bank stated that political elements rather than actual policy details would decide the ultimate outcome. The Senate Agriculture Committee released a bipartisan draft in November that aimed to solve problems that resulted from conflicts of interest. It would bar senior government officials, including Donald Trump and members of his family, from holding cryptocurrencies or playing a direct role in the industry while in office. TD Cowen said a longer runway could ease pressure and, under one scenario, Democrats might have to accept that conflict provisions would not apply retroactively to Trump. Market implications and industry views The digital asset market has shown decreasing value because of an extended period of market instability. CoinShares reported $952 million in weekly crypto investment product withdrawals during the period from Dec. 19 because the CLARITY Act delays created regulatory doubts, which triggered investor withdrawals. Coinbase Institutional’s John D’Agostino told CNBC he understands “why this is taking longer,” calling it foundational for the growth of the asset class. He predicted that stablecoin legislation would pass before comprehensive market structure rules became law because he believed bipartisan support would help the full bill reach completion by 2026. He showed that foreign nations obtain superior regulatory results through their experts who prefer to work outside the United States. What happens next The Responsible Financial Innovation Act remains under review by the Senate Banking Committee and Senate Agriculture Committee while both panels prepare to start their markup process, which might begin during the current month. Senator Scott predicts that Senate members will need to vote on the matter during the upcoming week to establish their official positions. The bill would proceed to presidential assessment after the chamber passes it without changes, but all following discussions would focus on challenging policy issues and approaching political timelines. The Senate continues its work, but vital policy matters, along with political obstacles because of upcoming elections, create doubts about both the duration of the rules and their ultimate form. The post Crypto regulation nears inflection point as Senate takes up market structure bill appeared first on Invezz
