^{Photo: The New York Times}

A New Twist in Crypto Regulation

The U.S. Senate has added a significant new provision to its long-debated market structure crypto bill, this time zeroing in on stock tokenization. The revised draft makes it clear that tokenized stocks and securities will not be treated as commodities if issued in digital form, addressing a growing concern about regulatory gray areas in the digital asset space.

This move is part of the Responsible Financial Innovation Act of 2025, a bill designed to define how digital assets will be regulated under either the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC).

Sen. Cynthia Lummis (R-Wyo.), one of the lead architects of the legislation, emphasized urgency: “We want this on the president’s desk before the end of the year.”

Why Stock Tokenization Matters

Stock tokenization—the process of converting traditional shares into blockchain-based digital tokens—has gained momentum in recent years, with platforms experimenting in both U.S. and overseas markets. Advocates argue tokenization could expand market access, allow 24/7 trading, and make settlement faster and cheaper. But regulators warn that without clear rules, it could blur the line between securities and commodities, potentially opening the door to manipulation and investor risks.

The Senate’s updated draft attempts to bring clarity. By explicitly defining tokenized securities as securities (and not commodities), lawmakers aim to prevent regulatory arbitrage and maintain strong investor protections.

A Race Against the Calendar

The Senate Banking Committee is expected to hold a vote on the SEC-related portion of the bill later this month, while the Agriculture Committee will handle the CFTC-related sections in October. If both committees move forward, the full Senate could hold a floor vote as early as November.

This timeline reflects lawmakers’ determination to keep pace with rapid innovation in crypto markets. Over the summer, Congress passed a landmark stablecoin bill, which President Donald Trump signed into law in July, marking one of the most significant federal moves in digital asset regulation to date.

The Political Challenge Ahead

Despite progress, the bill still faces hurdles. Senate Democrats have yet to rally behind the proposal, leaving its bipartisan prospects uncertain. With Republicans largely unified, at least seven Democratic senators would need to join them for the measure to pass.

Sen. Lummis said negotiations are ongoing to build consensus: “There have been efforts to pair Democrats and Republicans on certain sub-issues within the bill to make sure there’s substantial bipartisan agreement on key issues.”

A spokesperson for the Senate Banking Committee added that the draft incorporates “feedback from hundreds of stakeholders on a wide range of questions,” signaling a deliberate effort to balance industry innovation with investor protection.

The Stakes for Crypto and Wall Street

For crypto firms such as Coinbase and Ripple, the real prize isn’t just clarity on stablecoins—it’s the broader market structure bill. Defining which assets fall under SEC versus CFTC oversight could reshape how digital assets are issued, traded, and regulated in the U.S.

If passed, the legislation could usher in a new era of legitimacy for tokenized financial products, while also curbing speculative practices that regulators worry could destabilize markets. For Wall Street, it could determine how traditional securities firms participate in blockchain-powered trading.

As both chambers of Congress work toward reconciling their versions of the bill, the outcome will determine whether the U.S. can strike the delicate balance between innovation and investor protection in the fast-evolving digital economy.