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On January 12, 2026, the U.S. Senate Banking Committee released the full text of a bipartisan negotiated draft market structure bill addressing the regulation of U.S. digital asset markets, ahead of its scheduled committee markup. The draft builds on prior legislative initiatives—most notably the House's Digital Asset Market CLARITY Act ("CLARITY Act") (for more information, see our summary and analysis of the CLARITY Act here).
While legislative momentum on the bill has not lost steam, consensus remains elusive. The draft has reportedly attracted more than 137 proposed amendments to be debated during markup, and material revisions remain likely. As a result, the provisions summarized below should be viewed solely as directional signals of regulatory intent, rather than a settled or final legislative framework.
Key Takeaways
Restrictions on Stablecoin Rewards – The draft prohibits stablecoin issuers from offering rewards or yield solely for holding stablecoins, while allowing incentives tied to transactions or specific programs. This provision has been widely characterized as favorable to traditional banks and has already generated industry pushback, making it a likely focal point of amendment during markup.
Codifying digital asset classification through the Securities Act – The draft proposes amendments to the Securities Act of 1933 to expressly capture "ancillary assets" or "network tokens"—digital assets that may derive value from the entrepreneurial or managerial efforts of an issuer.
SEC rulemaking and disclosure obligations – The draft directs the SEC to adopt rules governing these "ancillary assets" or "network tokens", including tailored disclosure requirements designed to address governance, token economics, and other material characteristics relevant to investors and market participants.
DeFi regulatory framework under SEC and Treasury oversight – The draft instructs the SEC and the U.S. Treasury to develop rules clarifying how DeFi trading protocols must comply with applicable regulatory obligations, including disclosure, recordkeeping, and securities law requirements. This represents one of the most explicit legislative efforts to date to integrate DeFi activity within a formal regulatory perimeter.
BSA/AML obligations for DeFi platforms – The draft mandates the U.S. Treasury to define how DeFi platforms and protocols are expected to comply with the Bank Secrecy Act and anti-money laundering rules, paving for express statutory treatment of AML compliance in decentralized environments.
Digital assets within the regulated banking system – Financial institutions would be permitted to use digital assets and distributed ledger technology in connection with any products or services they are otherwise authorized to provide. At the same time, the draft directs the Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation to develop appropriate capital requirements, reflecting a prudential counterbalance to expanded permissions.
Positioning Within the CLARITY Act Framework
Taken together, the Senate Banking Committee draft continues the legislative trajectory initiated by the CLARITY Act: clarifying digital asset classification, delineating regulatory responsibilities, and replacing enforcement-driven outcomes with rulemaking and disclosure-based regimes.
At the same time, the current draft places greater emphasis on agency-led implementation, DeFi compliance pathways, and prudential treatment for institutions engaging with digital assets. Given the volume of anticipated amendments, the committee-reported version of the bill may ultimately differ materially from the text released ahead of markup.
Legislative Outlook
The Senate Agriculture Committee has scheduled a January 27 markup of its own digital asset market structure proposal (for more information, see our summary and analysis of the U.S. Senate Agriculture Committee's discussion draft here), as the Senate Banking Committee concurrently faces consideration of the proposed amendments.
About McMillan Crypto
McMillan LLP has a comprehensive understanding of blockchain, cryptocurrency, digital assets and other decentralized technologies. We use an integrative, pragmatic, and proactive approach when providing counsel in connection with an ever-changing regulatory landscape. Our cross-disciplinary team brings together specialists across many fields, including litigation, securities regulation, capital markets, investment funds and asset management, mergers and acquisitions, derivatives, technology, privacy and cybersecurity, intellectual property, consumer protection, anti-money laundering, financial services, tax, and bankruptcy and insolvency.
About McMillan's Perspective
While McMillan LLP does not practice U.S. law, and the foregoing is only an overview and does not constitute legal advice, our team closely monitors legal, regulatory, and market developments in the digital asset space globally. We remain committed to keeping our clients and audience informed about key international legislative initiatives and reflecting on how such developments may influence Canadian legislative approaches and regulatory positions on comparable digital assets and market structures. By staying ahead of digital innovation and cross-border policy shifts, McMillan supports clients in anticipating change, managing risk, and identifying new opportunities across the evolving digital economy.
The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.
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