Senate Republicans release crypto market structure discussion draft aimed at building off House-passed Clarity bill

Republican Senate Banking Committee Chair Tim Scott and other lawmakers are moving forward with their cryptocurrency market structure bill that they say expands work done on a bill passed out of the U.S. House of Representatives last week.

Scott, alongside Republican Sens. Cynthia Lummis, Bill Hagerty, and Bernie Moreno, released a discussion draft of crypto market legislation and also issued a request for information on Tuesday.

"This discussion draft represents a thoughtful, balanced approach that will provide the clarity our innovators need while providing robust consumer protections," Lummis said in a statement. "We cannot allow regulatory confusion to continue driving American innovation overseas."

Last week, the House voted 294-134 for the Digital Asset Market Clarity Act, gaining Democratic support. Seventy-eight Democrats voted yes on that bill. The House version takes a whole-of-crypto approach to regulating the industry and would create a regulatory framework for crypto in part through designating how the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission will regulate.

Clarity also requires digital asset firms to provide retail financial disclosures and segregate corporate and customer funds. Crypto proponents say clear rules are needed to protect consumers and unlock innovation.

"I'm grateful for the hard work of our House counterparts to craft smart, bipartisan legislation, and I look forward to building on their work here in the Senate," Sen. Scott said in a statement. "Working with President Trump, we can deliver a comprehensive, bipartisan regulatory framework for digital assets."

The draft released on Tuesday looks to define an "ancillary asset" to shed light on which digital assets are not securities and also tells the SEC "to tailor existing requirements to digital asset activity."

Earlier, Scott, Lummis, and others laid out principles and imposed a deadline of Sept. 30 to get something done on market structure. Market structure is viewed as a heavier lift given the wide range of complexities with regulating the whole industry compared to legislation that was signed into law last week to regulate stablecoins.

Nathan McCauley, CEO and co-founder of Anchorage Digital, said the draft draft represented a "necessary step forward in writing clear rules of the road for crypto."

"Knowing the who, how, and why behind crypto regulation is essential for protecting consumers and giving industry the certainty we need to build in the U.S. for the long term," McCauley said in a statement. 

Updated at 2 p.m. UTC time on July 22 to include additional details