Leading crypto builders say the Senate bill reduces risk, but the problem lies in the details about stablecoins.

Source: Yellow Original Title: Leading Crypto Builders Say Senate Bill Reduces Risk, but Stablecoin Details Are the Issue

Original Link: U.S. senators introduced a preliminary bill this week aimed at defining how cryptocurrencies are regulated in the United States, a measure that, according to industry participants, could begin to resolve years of legal ambiguity that have limited investment, product development, and institutional participation.

The proposal seeks to establish clearer definitions for digital assets and formally divide oversight responsibilities between the (Securities and Exchange Commission) (SEC) and the Commodity Futures Trading Commission CFTC.

According to the draft, the CFTC would gain authority over digital commodity spot markets, while the SEC would retain jurisdiction over securities and fundraising activities, a regulatory division that has been at the center of political debate for years.

Industry executives generally describe the draft as a significant shift, moving away from regulation based on coercive law enforcement toward statutory clarity, even as questions remain about how far legislation will go once amendments and political negotiations begin.

A Long-Awaited Attempt to Define Regulatory Boundaries

Executives across the crypto sector assert that the bill addresses one of the sector’s most persistent challenges: the uncertainty over which regulator has authority over which assets and activities.

They argue that this ambiguity has discouraged institutional capital and hindered product development, especially in the United States.

Hedy Wang, CEO and co-founder of Block Street, said the draft resembles a long-anticipated regulation for the industry.

In her view, clearer definitions of digital assets and a more explicit allocation of regulatory authority could reduce doubts among institutional investors who have stayed on the sidelines due to legal risks.

Others emphasized that the value of the bill lies in its effort to bring clarity through statute, rather than relying on future regulatory interpretations.

Rachel Lin, CEO of SynFutures, stated that drawing clear lines between securities and commodities, and defining the role of the CFTC in spot markets, would provide builders and investors with the certainty they have repeatedly demanded.

She added that unresolved details, particularly around stablecoins, will be decisive in determining whether the framework fosters competition or reinforces existing financial incumbents.

Stablecoins Emerge as a Key Fracture Line

The legislation also addresses stablecoin regulation, an area that has generated ongoing friction between crypto companies and the banking sector.

According to the proposal, crypto companies would be prohibited from paying interest solely for holding stablecoins, but could still offer rewards linked to activities such as payments or loyalty programs.

The SEC and CFTC would be instructed to issue joint disclosure rules governing such incentives.

Banking associations have argued that interest-bearing stablecoins could divert deposits from insured banks and threaten financial stability, while crypto advocates counter that banning rewards would stifle innovation and limit consumer choice.

David Carvalho, CEO of Naoris Protocol, noted that the bill reflects a shift from years of abstract debate toward crafting concrete standards.

He observed that uncertainty over which regulator might claim authority has previously led teams to delay or abandon projects.

Although he warned that legislative compromises could dilute the text, Carvalho said that even partial clarity could significantly reduce risks for companies operating in the U.S.

Legislative Momentum Grows, but Outcomes Remain Uncertain

The release of the draft coincides with procedural movements in the Senate.

The Senate Agriculture Committee, which oversees the CFTC, has set a schedule to release the legislative text before January 21 and hold an amendment session on January 27, marking the first defined timeline to advance legislation on the structure of the crypto market.

Lawmakers have been working to reconcile competing proposals, including the Digital Asset Market Clarity Act approved by the House of Representatives, which also seeks to divide oversight between the SEC and the CFTC.

It remains uncertain whether the Senate bill will become law, as Congress balances conflicting interests ahead of the 2026 midterm elections.

Nonetheless, industry participants assert that the combination of a detailed draft and a defined legislative process signals the clearest indication yet that Congress is attempting to replace years of regulatory uncertainty with a clear framework for U.S. cryptocurrency markets.