The U.S. Senate Banking Committee’s Subcommittee on Digital Assets held a pivotal hearing today titled “Exploring a Bipartisan Framework for the Regulation of the Digital Asset Market.” Experts from the cryptocurrency industry, legal sector, and policy research institutions urged lawmakers to enact clear legislation swiftly to ensure the United States maintains its competitiveness and regulatory authority in this critical technological field.
The hearing followed the recent release of the Principles for Digital Asset Market Structure Legislation, a bipartisan initiative led by Republican Senators Cynthia Lummis (Wyoming), Thom Tillis (North Carolina), Bill Hagerty (Tennessee), and Senate Banking Committee Chair Tim Scott (South Carolina).
The senators unanimously agreed that the U.S. needs a unified, clear, and enforceable regulatory framework to address the rapid evolution and potential risks of the digital asset market.
Regulatory Gaps Fuel Illicit Activity
During the hearing, Senator Lummis raised concerns about effectively curbing illicit activities in the crypto space. Former Commodity Futures Trading Commission (CFTC) Chair Rostin Behnam emphasized that without a regulatory framework, “bad actors tend to cluster in unregulated areas.” He called on Congress to swiftly implement robust anti-money laundering and anti-terrorism financing rules. Sarah Hammer of the University of Pennsylvania’s Wharton School noted that the U.S. could draw valuable lessons from jurisdictions like Singapore.
Senator Bill Hagerty highlighted the “rare bipartisan consensus” that now exists around digital asset legislation, calling for momentum to be sustained. Angela Alsobrooks, the sole Democrat present at the hearing, expressed optimism about crypto innovation but stressed the importance of strong investor protections. Behnam echoed this, stating, “Customer assets must be fully segregated” to ensure that investors’ interests are safeguarded in the event of platform bankruptcies.
The Cost of Delay
In the latter half of the hearing, Senator Bernie Moreno asked a critical question: What are the consequences if the U.S. continues to delay legislation?
Greg Xethalis, General Counsel at Multicoin Capital, responded bluntly: “We must act now.” He outlined two major risks:
Loss of Global Regulatory Leadership: Should other jurisdictions establish standards first, U.S. companies would be forced into a reactive position. For example, the EU’s MiCA legislation is quickly becoming a global benchmark.
Economic and Innovation Flight: Xethalis warned that just as the U.S. fell behind in 5G and semiconductor development, “we can’t afford to let crypto be the next failure.
Coinbase Vice President of Legal, Ryan VanGrack, reinforced these points in his testimony, stressing that legislation is not just about regulation—it is central to economic security and global competitiveness.
Bipartisanship Is Key
In closing, Senator Lummis reiterated the importance of bipartisan cooperation. She acknowledged that some Democrats are hesitant to engage with crypto legislation due to the Trump family’s associations with the industry. However, she asserted, “The impact of crypto extends far beyond the involvement of any presidential family. I hope Democrats will recognize this.”
She added that she is currently working with Democratic Senator Kirsten Gillibrand on legislative initiatives, expressing hope for a broader political alliance to guide the U.S. crypto market toward healthy and orderly development.