🇺🇸UPDATE 1: Senate Banking Committee Chairman @SenatorTimScott has released the bipartisan Crypto market structure bill text after months of negotiations.
🎯LOSS - Passive Yield for Stablecoin = GONE
The Act defines "Custodial and Ancillary Staking Services" as a recognized activity. It distinguishes these services as "administrative or ministerial in nature," allowing registered intermediaries to facilitate staking for customers.
The act requires that customer assets be segregated and not commingled with the platform's own funds, although they may be pooled with other customer funds for convenience (e.g., in an omnibus account).
✅STATUS QUO - AML / KYC - Strict for Intermediaries. Exchanges and brokers must comply with the Bank Secrecy Act, perform KYC, and monitor for illicit finance.
🔥WIN - Self Custody
Right to Self-Custody: Section 105(c) explicitly states that a "United States individual shall retain the right to maintain a hardware wallet or software wallet" for the purpose of facilitating their own lawful custody of digital assets.
Protection of Peer-to-Peer Transactions: The same section guarantees the right to engage in "direct, peer-to-peer transactions" with other individuals using self-custody wallets, without reliance on financial intermediaries.
Protection for Wallet Developers: Section 109 prohibits classifying non-controlling blockchain developers or providers of "hardware or software to facilitate a customer's own custody" as money transmitters. This protects wallet creators (e.g., @Ledger , @Tangem , @MetaMask developers) from being regulated as financial institutions solely for writing code.
🔥WIN - DEFI
The Act seeks to protect decentralized crypto by creating specific exclusions that prevent DeFi protocols and developers from being regulated as centralized exchanges or brokers.
DeFi Exclusions from SEC Regulation: Section 309 explicitly states that a person shall not be subject to the Securities Exchange Act solely for activities like:
Developing or publishing DeFi trading protocols.
Providing user interfaces (front-ends) for blockchain systems. Validating transactions or operating nodes.
The
impact on a consumer using DeFi products and protocols is generally protective, explicitly shielding individual users and software developers from the strict regulations applied to centralized exchanges (like Coinbase).
For consumers, the Act establishes a legal "safe harbor" to continue using DeFi without forced intermediaries, though it does not provide immunity for illicit financial activities.
🎯Likelihood of Passing
Current Status (Jan 13, 2026): Medium-High (60-70%)
👀The bill has a strong chance of becoming law in early 2026, but it will likely require either stripping out or softening the strict "Anti-CBDC" ban, or adding concessions to banks regarding stablecoin reserves, to clear the Senate filibuster threshold.
Full PDF: https://t.co/blPpfzPYKS
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