The Chairman of the Senate Banking Committee predicts that 18 Democrats will support the comprehensive encryption bill! A bipartisan breakthrough may occur in September.

Tim Scott, the chairman of the U.S. Senate Banking Committee, predicts that 12 to 18 Democratic senators will support the comprehensive crypto market structure legislation to be introduced in September, bringing a glimmer of bipartisan cooperation to the long-stalled crypto regulatory reform. This advancement follows the House’s passage of the Clarifying Lawful Overseas Use of Data (CLOUD Act) in July, which garnered support from 78 Democrats.

Bipartisan Cooperation to Advance Senate Version of Encryption Bill

Scott revealed that he is holding private talks with Democratic members outside of the Banking Committee to seek bipartisan support when the bill is formally submitted in September.

House version: Passed on July 17 with 294 votes to 134, clarifying the regulatory boundaries between the SEC and CFTC, and establishing a registration pathway for digital asset platforms.

Senate version: On July 22, a discussion draft was jointly released by Scott and Senators Cynthia Lummis, Bill Hagerty, and Bernie Moreno, expanding the definition of ancillary assets, modernizing disclosure requirements, and terms for digital asset services in the banking industry based on the House bill.

Key Points of the Regulatory Framework: SEC and CFTC Collaborative Regulation

The Senate discussion draft continues and deepens the core design of the CLARITY Act:

Dual agency coordination: The SEC and CFTC regulate digital asset platforms through a joint registration process.

Decentralized Standards: Tokens that meet functional decentralization testing and public shareholding requirements may ultimately be exempt from securities law constraints.

Disclosure Levels: Establish different levels of token disclosure obligations based on market capitalization rankings.

Stablecoins and Custody: Unified Isolation and Audit Standards, Recognized Qualified Custodians Manage Stablecoins and Digital Assets.

Asset classification assistance: Avoid misclassifying certain digital tokens as securities and exempt certain sales registration requirements under specific conditions (annual revenue ≤ 75 million USD, term ≤ 4 years).

Senator’s Viewpoint: Preventing Innovation Leakage and Protecting Consumers

Lumis: Emphasizes the importance of regulatory clarity to prevent crypto innovation from flowing overseas and clearly distinguishes between digital asset securities and commodities.

Hagerty: Pointed out that outdated laws and regulatory uncertainty hinder innovation and leave consumers without adequate protection.

Scott: Believes that bipartisan collaboration is key to advancing modern encryption regulation and hopes to achieve a similar level of bipartisan support in the Senate as in the House of Representatives.

Legislative Process and Market Impact

The banking committee has sought public opinion on more than 35 issues to provide a basis for the final legislation.

Legislative process: Submit the bill in September → Bank Committee review → Full House vote → Negotiate a unified version with the House of Representatives → President signs into effect

If the bill is passed, it will provide a clear regulatory framework for the digital asset market in the United States, potentially attracting more institutional funds and accelerating the legalization and maturation of the encryption industry.

Conclusion

Senate Banking Committee Chairman Tim Scott’s confidence in garnering support from 18 Democrats indicates that U.S. crypto regulatory reform is moving towards a rare bipartisan consensus. With the September bill submission approaching, the market will closely watch whether this legislation can become a milestone for the regulation of digital assets in the U.S. and bring a new wave of confidence to the global crypto market. For more updates on crypto policy and regulatory developments, please follow the official Gate platform.