Senate Banking Committee Releases Draft Crypto Market Structure Bill Facing 137 Proposed Amendments At Markup – Fin Tech

On January 12, 2026, the U.S. Senate Banking Committee released
the full text of a bipartisan negotiated draft market structure
bill addressing the regulation of U.S. digital asset markets, ahead
of its scheduled committee markup. The draft builds on prior
legislative initiatives—most notably the House‘s
Digital Asset Market CLARITY Act (“CLARITY
Act“) (for more information, see our summary and
analysis of the CLARITY Act here).

While legislative momentum on the bill has not lost steam,
consensus remains elusive. The draft has reportedly attracted more
than 137 proposed amendments to be debated during markup, and
material revisions remain likely. As a result, the provisions
summarized below should be viewed solely as directional signals of
regulatory intent, rather than a settled or final legislative
framework.

Key Takeaways

Restrictions on Stablecoin Rewards – The
draft prohibits stablecoin issuers from offering rewards or yield
solely for holding stablecoins, while allowing incentives tied to
transactions or specific programs. This provision has been widely
characterized as favorable to traditional banks and has already
generated industry pushback, making it a likely focal point of
amendment during markup.

Codifying digital asset classification through the
Securities Act – The draft proposes
amendments to the Securities Act of 1933 to expressly
capture “ancillary assets” or “network
tokens”—digital assets that may derive value from the
entrepreneurial or managerial efforts of an issuer.

SEC rulemaking and disclosure obligations
– The draft directs the SEC to adopt rules governing these
“ancillary assets” or “network tokens”,
including tailored disclosure requirements designed to address
governance, token economics, and other material characteristics
relevant to investors and market participants.

DeFi regulatory framework under SEC and Treasury
oversight – The draft instructs the SEC and the U.S.
Treasury to develop rules clarifying how DeFi trading protocols
must comply with applicable regulatory obligations, including
disclosure, recordkeeping, and securities law requirements. This
represents one of the most explicit legislative efforts to date to
integrate DeFi activity within a formal regulatory perimeter.

BSA/AML obligations for DeFi platforms –
The draft mandates the U.S. Treasury to define how DeFi platforms
and protocols are expected to comply with the Bank Secrecy Act and
anti-money laundering rules, paving for express statutory treatment
of AML compliance in decentralized environments.

Digital assets within the regulated banking
system – Financial institutions would be permitted
to use digital assets and distributed ledger technology in
connection with any products or services they are otherwise
authorized to provide. At the same time, the draft directs the
Federal Reserve, the Office of the Comptroller of the Currency, and
the Federal Deposit Insurance Corporation to develop appropriate
capital requirements, reflecting a prudential counterbalance to
expanded permissions.

Positioning Within the CLARITY Act
Framework

Taken together, the Senate Banking Committee draft continues the
legislative trajectory initiated by the CLARITY Act: clarifying
digital asset classification, delineating regulatory
responsibilities, and replacing enforcement-driven outcomes with
rulemaking and disclosure-based regimes.

At the same time, the current draft places greater emphasis on
agency-led implementation, DeFi compliance pathways, and prudential
treatment for institutions engaging with digital assets. Given the
volume of anticipated amendments, the committee-reported version of
the bill may ultimately differ materially from the text released
ahead of markup.

Legislative Outlook

The Senate Agriculture Committee has scheduled a January 27
markup of its own digital asset market structure proposal (for more
information, see our summary and analysis of the U.S. Senate
Agriculture Committee’s discussion draft here), as the Senate Banking
Committee concurrently faces consideration of the proposed
amendments.

About McMillan Crypto

McMillan LLP has a comprehensive understanding of blockchain,
cryptocurrency, digital assets and other decentralized
technologies. We use an integrative, pragmatic, and proactive
approach when providing counsel in connection with an ever-changing
regulatory landscape. Our cross-disciplinary team brings together
specialists across many fields, including litigation, securities
regulation, capital markets, investment funds and asset management,
mergers and acquisitions, derivatives, technology, privacy and
cybersecurity, intellectual property, consumer protection,
anti-money laundering, financial services, tax, and bankruptcy and
insolvency.

About McMillan’s Perspective

While McMillan LLP does not practice U.S. law, and the foregoing
is only an overview and does not constitute legal advice, our team
closely monitors legal, regulatory, and market developments in the
digital asset space globally. We remain committed to keeping our
clients and audience informed about key international legislative
initiatives and reflecting on how such developments may influence
Canadian legislative approaches and regulatory positions on
comparable digital assets and market structures. By staying ahead
of digital innovation and cross-border policy shifts, McMillan
supports clients in anticipating change, managing risk, and
identifying new opportunities across the evolving digital
economy.

The foregoing provides only an overview and does not
constitute legal advice. Readers are cautioned against making any
decisions based on this material alone. Rather, specific legal
advice should be obtained.

© McMillan LLP 2025