U.S. Regulation

What Is the Crypto Market Structure Bill?

Editorial Team
6 min read
Published: November 19, 2025
Updated: November 19, 2025

An overview of the Market Structure Bill, its scope, goals, and implications for U.S. crypto policy.

U.S. crypto regulationMarket Structure BillSECCFTCSection:Legislation

What Is the Crypto Market Structure Bill?

A comprehensive guide to the U.S. crypto Market Structure Bill: legislative background, core provisions, SEC–CFTC boundaries, and market impact. Built as the Regulation Hub cornerstone with internal links to supporting deep dives, optimized for SEO and long‑tail discovery.

1) Why does the U.S. need a Market Structure Bill?

Over the last decade, crypto grew rapidly while U.S. rules stayed fragmented. Some tokens were treated as securities, others as commodities; platforms often combined issuance, trading, custody, and clearing roles while facing state‑by‑state differences. That uncertainty slowed innovation and raised investor risk. The bill aims to:

  • Clarify when a token is a security vs a commodity using functional, economic tests
  • Set tiered requirements for trading venues, brokers, custodians, and clearing
  • Standardize issuance and ongoing disclosures to improve investor protection
  • Coordinate responsibilities across SEC and CFTC to reduce overlap and gaps
  • Provide pathways for stablecoin payments, tokenization (RWA), and DeFi interfaces

The bill is not a blanket ban or simple licensing checkbox; it is a practical framework designed to unlock compliant innovation while protecting consumers and financial stability.

2) Core definitions: how are crypto assets classified?

Classification hinges on function and economic substance, extending the Howey perspective with crypto‑specific signals:

  • Issuance and fundraising: reliance on the efforts of others for expected profits
  • Network maturity and decentralization: concentration of governance or upgrade power
  • Use orientation: payment, settlement, compute, governance voting with independent utility
  • Disclosures and circulation: presence of ongoing reporting and risk labeling

If an asset is a Digital Commodity, trading and derivatives fall primarily under CFTC; if it is a Digital Security, issuance and secondary trading fall primarily under SEC. Mixed cases may receive transitional arrangements to protect incumbents while migrating to disclosure‑heavy regimes.

3) Venues and markets: trading, custody, and clearing

Expect layered requirements for exchanges and related service providers:

  • Venue classification: spot exchanges, ATSs, broker‑dealers, and market makers with clear licenses
  • Custody standards: cold–hot segregation, threshold signatures, insurance, on‑chain audits/PoR
  • Clearing and settlement: segregated accounts, netting, safeguards against run‑risk and chain congestion
  • Risk management: liquidity thresholds, market manipulation monitoring (including on‑chain patterns), exposure limits
  • Transparency: fee schedules, risk labels per pair, tokenomics and governance disclosures

This pushes Coinbase, Kraken, Binance US and peers toward “engineered compliance,” making U.S. venues more investable for global capital.

See also:

4) Issuance and disclosures: from primary to secondary markets

To reduce regulatory arbitrage, the bill envisions traceable disclosure paths across issuance and secondary circulation:

  • Standardized whitepapers: architecture, team, distribution, unlock schedules, fund use, key risks
  • Ongoing reporting: upgrades, governance changes, reserves/hedging, security incidents
  • AML/sanctions compliance: KYC/AML, suspicious activity reporting, sanctions lists, Travel Rule interoperability
  • Investor suitability: knowledge checks and guardrails for complex products (leverage, perpetuals)

This improves price discovery, supports ETF and RWA product design, and broadens institutional participation.

See also:

5) Stablecoins and payments: structural tailwinds for USDC

Stablecoins are a central chapter focused on reserve transparency, clearing rails, merchant/retail protections, and issuer qualification:

  • Reserves: audit cadence, asset mix, term structure, on‑chain proofs, third‑party custody
  • Clearing: bank and clearinghouse interfaces, 24/7 settlement, compliant cross‑border corridors
  • Issuers: qualified institutions, loss funds, consumer remediation rules
  • Merchant/retail: fee caps, refunds/chargebacks, tax reporting and invoicing standards

This favors USDC, whose compliance‑first model aligns with the bill’s goals.

See also:

6) Regulatory boundaries: SEC vs CFTC

The long‑standing friction is overlapping jurisdiction. The bill’s bias is functional regulation: SEC leads where securities attributes dominate; CFTC leads where commodity/derivatives attributes dominate. A joint working model and shared data are expected to:

  • Reduce duplication and gaps; converge on manipulation/insider trading definitions
  • Build cross‑market risk databases for on‑chain/off‑chain abnormal flows
  • Define DeFi front‑end responsibilities for disclosures and risk prompts

Deep dive: SEC vs CFTC Boundaries Explained

7) Politics and process: who accelerates, who resists?

Two‑party dynamics set the pace. Agenda control by the Senate Banking Committee, timelines signaled by Tim Scott, and cross‑committee coordination matter. In split‑government scenarios, the bill may bifurcate: a stablecoin mini‑bill first, followed by broader market structure.

See also:

8) Timeline: probabilities and paths

Typical path: committee → House/Senate floor votes → conference reconciliation → presidential signature. A realistic progression:

  1. Committee text and hearings in the current session
  2. House/Senate votes and reconciliation next session
  3. Stablecoin provisions pass earlier, forming a “payments‑first” gradient
  4. Agencies issue implementation guidance and transitional exemptions

Detailed analysis: Timeline: When Will the Bill Pass?

9) Market impact: winners and pivots

Likely winners:

  • Compliant stablecoins and payment rails (USDC ecosystem)
  • Chains and apps with robust disclosures and governance
  • Venues and custodians with auditable risk controls

Required pivots:

  • Issuers with weak disclosures or concentrated control
  • Venues reliant on opacity or excessive leverage
  • Payment providers lacking standardized cross‑border compliance and tax reporting

Further reading:

10) Practical playbook for investors and institutions

  • Build a due‑diligence checklist: disclosures, reserves, governance, upgrade powers, audit trail
  • Compare fees and liquidity across venues using Fee Calculator and Exchanges
  • Allocate toward “stablecoin + spot + compliant interoperable assets” to reduce policy uncertainty
  • Track ETF and RWA pipelines to capture post‑rule capital flows
  • Prepare dual rails for cross‑border settlement: on‑chain plus compliant reporting

11) FAQ

Q1: If a token is deemed a security, does it vanish from exchanges? No. Registration and exemptions exist; the key is disclosures and suitability.

Q2: Will DeFi front‑ends be banned? Unlikely. Expect interface responsibilities: risk prompts, KYC/blacklist interop.

Q3: Must stablecoins be bank‑issued? Not strictly, but issuers need stronger capital, reserve transparency, and audits.

12) Conclusion

The Market Structure Bill is not anti‑crypto; it’s about giving digital assets the same rule‑of‑law backbone as traditional finance. It will shape whether the U.S. leads in stablecoins, RWA, ETFs, and cross‑border settlement. The right response now is engineered compliance and transparent information.

Recommended reads (internal links)

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