On May 5th, leaders of the U.S. House Financial Services and Agriculture Committees released a discussion draft outlining a federal framework for regulating the U.S. Crypto asset industry.
House Financial Services Committee Chairman French Hill (Republican from Arkansas), Agriculture Committee Chairman Glenn "G.T." Thompson (Republican from Pennsylvania), Digital Assets Subcommittee Chairman Bryan Steil (Republican from Wisconsin), and Commodities Market Subcommittee Chairman Dusty Johnson (Republican from South Dakota) jointly issued the legislative draft.
These legislators emphasized that the bill aims to coordinate regulatory responsibilities between the SEC and the Commodity Futures Trading Commission (CFTC), while providing legal definitions for key terms in blockchain and Crypto asset markets.
Chairman Hill stated: "This discussion draft further develops the bipartisan, bicameral progress made in the 118th Congress, providing a lasting framework to protect consumers and maintain U.S. leadership in digital innovation."
He added that the committee intends to incorporate public feedback and work with the Donald Trump administration to advance the final bill's enactment and implementation.
Digital Asset Classification
The legislation introduces definitions for core industry concepts, including digital commodities, blockchain systems, decentralized governance, approved payment stablecoins, and mature blockchain systems.
Additionally, the draft specifically states that distributions through Mining, staking, or user rewards, known as "end-user distributions," are neither considered securities nor constitute sales under current law.
Chairman Thompson emphasized the urgency of clear legislation, noting that the proposed framework will fill regulatory gaps and provide the certainty developers and users have long called for.
The draft establishes registration pathways for digital commodity exchanges, brokers, and traders under CFTC regulation, while allowing the SEC to retain jurisdiction over securities and certain hybrid assets. Entities performing custodial functions, facilitating trades, or interacting with customers must follow newly defined registration and disclosure procedures.
Subcommittee Chairman Steil stated: "This marks the beginning of the golden age of digital assets, with the House leading the way."
Johnson concurred, saying the U.S. must provide a sensible regulatory system to maintain its position as a global Crypto asset investment and innovation center.
The draft also preserves protections for DeFi protocols and self-custody. It stipulates that DeFi transaction protocols and messaging systems need not comply with traditional financial regulations as long as they do not custody user funds or exercise discretionary power.
The bill also prohibits the Treasury or Financial Crimes Enforcement Network (FinCEN) from creating rules that limit individuals' ability to self-custody Crypto assets through wallets.
Initiating Legislative Process
The committee has scheduled a joint hearing on May 6th titled "The Future of U.S. Innovation and Digital Assets: A 21st Century Blueprint" to launch formal legislative discussions and gather stakeholder input.
The draft contains provisions for joint SEC and CFTC rule-making and research into DeFi, Non-Fungible Tokens, and blockchain infrastructure through expanded federal agency innovation office functions.
By establishing legal definitions and clear jurisdictional boundaries, the proposed bill aims to eliminate uncertainty in U.S. Crypto asset regulation while encouraging responsible development and oversight of the digital asset market.
