Senate Hearing on Digital Assets

Today, February 26, the United States Senate Committee on Banking, Housing, and Urban Affairs subcommittee on Digital Assets is hosting a hearing on “Exploring Bipartisan Legislative Frameworks for Digital Assets.”

This hearing follows Donald Trump’s focus on cryptocurrency during his second term, where he created a working group to recommend regulatory and legislative proposals.

The Senate Digital Assets Legislation

The chairman for this subcommittee is Cynthia Lummis (R-WY), an advocate for crypto. She recently introduced the GENIUS Act, a new stablecoin bill, alongside Tim Scott (R-SC), Bill Hagerty (R-TN), and Kirsten Gillibrand (D-NY).

This bill aims to establish jurisdiction over stablecoin issuers who “issue a payment stablecoin in the United States.” Payment stablecoins are digital assets designed for payments or settlements, with issuers obligated to convert or redeem them at a fixed amount of monetary value.

This may exclude some existing stablecoins; for instance, Tether states it can “delay or suspend” user redemption. Conversely, Circle, the largest US-based stablecoin issuer, claims to redeem 1 USDC for 1 USD.

Protos reached out to the Senators’ offices to clarify if the bill applies to Tether. A press team member indicated it would, but further clarification was not provided.

Read more: Crypto promises that Donald Trump must now live up to

In addition to the stablecoin bill, recent press conferences have discussed advancing a market structure bill resembling the earlier FIT 21, which would expand the Commodity Futures Trading Commission’s (CFTC) regulatory role in the crypto market due to a broad definition of “decentralized.”

The Witnesses

Today’s hearing witnesses include:

• Lewis Cohen, Partner at Cahill Gordon & Reindell LLP
• Jonathan Jachym, Deputy General Counsel and Global Head of Policy and Government Relations, Kraken
• Jai Massari, Chief Legal Officer at Lightspark
• Timothy Massad, Research Fellow and Director of Digital Assets Policy Project at Harvard University.

Cohen’s testimony supports a legislative framework similar to the Responsible Financial Innovation Act introduced by Gillibrand and Lummis. Jachym advocates for expanding the CFTC’s authority over spot markets to support innovation and consumer protection.

Massari focuses on stablecoin regulations, emphasizing that users must view stablecoins as digital cash for broader adoption. Massad, a former CFTC chairman, expressed concerns about jurisdictional issues with Tether and criticized the lack of enforcement provisions in the GENIUS Act and STABLE Act regarding non-US-based issuers. He also raises worries about the FIT 21 legislation’s self-certification process possibly leading to abuse, noting that its decentralization metrics may not be genuinely decentralized.

Protos will monitor the hearing and provide updates as they develop.