We'll know the outcome next week! The U.S. Congress is set for a key review of the "Responsible Financial Innovation Act."

Wyoming Senator Cynthia Lummis revealed at the Blockchain Association Policy Summit that a hearing on the Responsible Financial Innovation Act is expected to take place in the U.S. Congress next week. She stated that the goal is to share the final draft of the bill by this weekend, allowing industry professionals and bipartisan lawmakers to review it before deliberations next week. The bill will grant the Commodity Futures Trading Commission (CFTC) greater regulatory authority over digital assets, marking a significant shift of oversight from the Securities and Exchange Commission (SEC).

Team Pushing to the Limit as Lummis Sets Weekend Deadline

(Source: Blockchain Association)

“Our staff are exhausted,” Lummis said at the Blockchain Association Policy Summit on December 9, describing the working conditions of her and Senator Kirsten Gillibrand’s teams. This statement highlights the intense negotiations behind the Responsible Financial Innovation Act in Congress. Lummis noted that the cryptocurrency industry is “starting to get a little concerned” about the bill’s progress, and the draft has been “changing a lot every few days” during bipartisan discussions.

These frequent changes indicate the bill is in its critical final negotiation phase. Lummis revealed, “My goal is to share a draft this weekend, which is our best product so far, for industry review, for Republicans and Democrats to review, and then to deliberate next week.” This timeline means there will be very limited time for all parties to evaluate and provide feedback between the release of the draft and next week’s hearing.

Lummis added, “I think the best thing now is to release the product, raise the price next week, and then let everyone have a good Christmas break.” This statement reflects both the urgency to move the bill forward and the team’s determination to complete key steps before year-end. The hearing refers to lawmakers reviewing amendments and modifications before a Senate vote, a crucial stage in the legislative process.

However, even if the hearing proceeds smoothly, it is unclear whether the Republican plan can advance successfully. Even if senators begin deliberations, other obstacles—such as partisan resistance—could delay the vote. This means next week’s hearing is just one step in a long legislative process, not the final goal.

Why Has There Been a Six-Month Delay Since House Passage in July?

Although the Banking Committee released a discussion draft of the market structure bill after the Digital Asset Market Transparency Act passed the House in July, the Responsible Financial Innovation Act’s progress in Congress has slowed. This delay stems from a combination of factors.

First is the longest government shutdown in U.S. history. During the shutdown, much legislative work stalled, with lawmakers and staff forced to deal with budget crises rather than regular legislation. Second, some lawmakers opposed the bill’s decentralized finance (DeFi) provisions. DeFi regulation has been a point of contention, as traditional financial regulatory frameworks are difficult to apply to decentralized, code-based systems. Balancing investor protection and innovation has become a topic of heated debate between members of both parties.

According to Politico on Monday, bipartisan negotiations on market structure are ongoing, with plans for a December hearing. In September, Lummis stated she expected the bill to be signed into law in 2026. This timeline suggests that even if next week’s hearing goes smoothly, it will still take several months from deliberation to final vote and presidential signature.

This delay is not entirely negative. Frequent revisions and bipartisan negotiations, while time-consuming, also ensure the bill more comprehensively considers all interests. The cryptocurrency industry, traditional financial institutions, consumer protection groups, and lawmakers from various political backgrounds have all voiced their concerns during this process. In theory, the final version of the bill will be more feasible and balanced.

Three Major Impacts of the Bill on the Crypto Industry

Although the bill has yet to pass the Senate Banking Committee and the Senate Agriculture Committee, many in the cryptocurrency industry have supported Congress’ legislative efforts, noting it would bring clarity and benefits to the market. Paul Grewal, Chief Legal Officer of the largest compliant crypto exchange in the United States, said Wednesday: “Once Congress passes the market structure bill, under the leadership of SEC Chairman Paul Atkins, more and more financial activities will move on-chain. Our leaders need to reach consensus on the bill’s final details as soon as possible.”

What Changes Will the Responsible Financial Innovation Act Bring?

Reallocation of Regulatory Authority: The CFTC will gain greater authority over digital assets, shifting the current SEC-dominated landscape. This means more crypto assets may be classified as commodities rather than securities, subject to a more relaxed regulatory environment.

Enhanced Market Transparency: The bill requires digital asset platforms to comply with stricter disclosure requirements, giving investors more comprehensive information and helping reduce fraud and market manipulation.

Accelerated Institutional Entry: A clear regulatory framework will eliminate compliance concerns for institutional investors, allowing Wall Street banks and asset managers to provide crypto asset services with greater confidence.

CFTC Takeover Will End SEC’s Era of Crypto Enforcement

Although the final version of the bill being considered by the U.S. Senate has not been made public at the time of writing, previously released drafts show that the bill would grant the Commodity Futures Trading Commission (CFTC) greater regulatory authority over digital assets. This would mark a significant change from the current situation, where the Securities and Exchange Commission (SEC) holds primary regulatory and enforcement authority.

This power shift is significant. Under former SEC Chairman Gary Gensler, the SEC adopted a tough enforcement approach toward the crypto industry, suing or threatening enforcement action against the largest compliant U.S. crypto exchange, Ripple Labs, and other major platforms. Gensler insisted that most crypto assets are securities and should be regulated by the SEC. However, this position faced strong opposition from the industry and some lawmakers, who argued that many crypto assets are closer to commodities.

If the Responsible Financial Innovation Act passes, regulatory focus will shift to the CFTC. The CFTC traditionally oversees futures, options, and other derivatives markets, with a relatively relaxed regulatory philosophy focused more on market efficiency than investor protection. This shift could create a more favorable regulatory environment for the crypto industry, but it also raises concerns about insufficient consumer protection.