Key Takeaways
- Under the proposed framework, assets that meet criteria for decentralization would fall under the CFTC’s jurisdiction as commodities
- Assets with a centralized structure would be regulated by the SEC, maintaining investor protections and disclosure obligations.
A new draft bill released by House Republicans on May 5 proposes a sweeping overhaul of digital assets regulation in the United States. Titled as a discussion draft for public feedback, the proposal seeks to draw definitive lines between the roles of the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) in overseeing the fast-evolving crypto market.
The draft comes ahead of a joint House hearing, where members from the Financial Services and Agriculture Committees will debate the future regulatory landscape for digital assets. The draft bill is co-authored by Representatives French Hill (Arkansas), G.T. Thompson (Pennsylvania), Bryan Steil (Wisconsin), and Dusty Johnson (South Dakota)—all senior Republicans on key financial oversight panels.
At the heart of the bill is a classification system that distinguishes between decentralized and centralized digital assets. Under the proposed framework, assets that meet criteria for decentralization would fall under the CFTC’s jurisdiction as commodities. Meanwhile, assets with a centralized structure would be regulated by the SEC, maintaining investor protections and disclosure obligations.
The proposal marks an update to the earlier Financial Innovation and Technology for the 21st Century Act (FIT21), which passed the House last year with bipartisan support but stalled in the Senate. This new draft incorporates additional provisions, including transparency requirements for crypto developers, the right for individuals to hold their own digital assets (self-custody), consumer protection measures, and expanded state-level authority to regulate crypto businesses.
Committee leaders framed the draft as an effort to solidify America’s standing in the global fintech space. “We’ve laid a strong bipartisan foundation in the last Congress,” Chairman Hill said in a statement. “This bill moves that work forward and gives U.S. innovators clear rules, while protecting consumers from bad actors.”
Representative Steil added that the bill aims to keep the U.S. competitive in a sector already reshaping the global economy. “We’re at a pivotal moment. This framework is about ensuring the U.S. remains the home of financial innovation, not a spectator.”
The proposed legislation lands in a crowded field. Two other major crypto bills—the GENIUS Act and the Stable Act—are also moving through Congress, primarily focusing on the regulation of stablecoins. But efforts have hit roadblocks. The GENIUS Act recently lost support from nine Democratic senators who raised concerns about unresolved issues in the text.
Despite such challenges, major industry groups, including the Blockchain Association and the Crypto Council for Innovation, have urged lawmakers to move quickly. In a joint statement, they emphasized the need for a stable regulatory environment to unlock the full potential of the digital economy.
