Senate Releases Comprehensive Crypto Regulations Bill

The US Senate Banking Committee has taken a significant step towards regulating the cryptocurrency market with the release of the full text of the CLARITY Act. This 309-page bill proposes comprehensive regulations for the industry, including a key provision that would require stablecoin issuers to hold high-quality liquid assets against every token in circulation.

The legislation, which will be discussed at an upcoming committee hearing on Thursday, establishes jurisdictional lines between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). This division is intended to clarify whether a token functions as a security or a digital commodity, with the SEC overseeing securities and the CFTC regulating commodities.

The bill's reserve mandate would require stablecoin issuers to hold short-duration U.S. Treasuries under 90 days, overnight repurchase agreements, or central bank deposits as collateral for their tokens. This requirement is stricter than current market practice and may put pressure on some issuers to adapt their business models.