The U.S. crypto bill introduces clear legal criteria to differentiate between digital commodities and digital securities. The framework aims to resolve longstanding regulatory uncertainty that has limited institutional adoption, offering a structured division of responsibilities between the CFTC and the SEC. Decentralized assets such as Bitcoin and Ethereum would fall under CFTC authority, while tokens with investment contract characteristics would remain under the SEC.
This proposal seeks to standardize oversight and reduce ambiguity that has historically depended on fragmented interpretations. By assigning categories through statutory definitions, lawmakers intend to create predictable and durable regulatory boundaries, particularly for assets operating on decentralized networks. The shift is designed to support market expansion while reinforcing investor protection standards.
How the Bill Reshapes Categories and Jurisdictions
The legislative drafts introduced this year provide explicit legal definitions that determine the jurisdictional split between the Commodity Futures Trading Commission and the Securities and Exchange Commission. This approach clarifies oversight responsibilities according to statutory criteria rather than relying exclusively on case specific enforcement. Tokens that meet defined commodity attributes fall under the CFTC, creating a pathway for decentralized assets. Tokens that fail to meet those attributes remain in the SEC‘s securities framework, preserving its investor protection mandate.
A key provision classifies as a digital commodity any token that is fungible, directly transferable between parties, and recorded on a public and cryptographically secure blockchain. Widely decentralized cryptocurrencies such as BTC and ETH meet that threshold. Assets that do not satisfy these criteria stay within the securities perimeter, which ensures that investment contract characteristics trigger disclosure and registration obligations. This separation seeks to align regulatory treatment with the underlying economic structure of each asset.
Several proposals are now shaping the direction of the debate. A bill from the Senate Agriculture Committee would classify certain cryptocurrencies as commodities, while the House’s Digital Asset Market Clarity Act and a draft that builds on parts of FIT21 expand that structure. There is also a provision that clearly states payment stablecoins should not be treated as either securities or commodities. Viewed together, these initiatives show lawmakers trying to move away from after the fact enforcement and toward a clearer set of upfront rules. It is an early but noticeable sign that Congress is pushing for a more coherent and predictable regulatory framework.
Regulatory Impact on Issuers, Platforms and Major Investors
For issuers, clearer rules help reduce uncertainty but they also introduce new structural expectations. How a token is designed, how decentralized it becomes and how it is distributed will shape its final regulatory category, which then defines the type of disclosures and capital requirements involved. This pushes teams to plan earlier and to treat compliance as part of the product itself, since choices around token economics can meaningfully influence the outcome.
Exchanges and brokers will need to rethink several parts of their operations as they adapt to assets falling under CFTC or SEC supervision. Workflows, registrations and the separation between custody, brokerage and trading will need to be updated, which may generate noticeable upfront compliance costs. These adjustments could reshape what gets listed and how platforms manage risks, especially for those that handle both types of assets.
Retail investors receive stronger protection thanks to expanded disclosure requirements for tokens treated as securities, although this may narrow the range of assets available on regulated venues. Institutional investors benefit from the clearer legal boundaries, since they make it easier to integrate digital assets into established risk frameworks. With more certainty, liquidity and institutional participation may improve, bringing crypto markets closer to traditional financial standards.
The legislative proposals aim to reorganize oversight by relying on technical definitions and decentralization tests to determine whether the CFTC or the SEC supervises a given asset. This marks a shift toward preventive rules instead of enforcement as the primary tool, creating a more predictable environment for market participants. The next meaningful step will be the movement of these drafts through Congressional committees, where final changes to decentralization criteria and disclosure rules will take shape.
