US Tokenization Legislation: Every Bill, Every Hearing, Every Vote

The United States came to federal crypto legislation later than Switzerland, earlier than most of Asia, and far later than any observer of its market dominance would have predicted. By mid-2025, the US held somewhere between 40% and 50% of global spot crypto trading volume, operated the world’s largest Bitcoin ETF market, and had produced the most consequential enforcement actions in the sector’s history — all without a single statute specifically authorising or defining the activity being regulated. The GENIUS Act changed that. Understanding how the US got there, what the law actually says, and what remains unresolved is the prerequisite to understanding American digital asset regulation.

The Regulatory Improvisation Era (2013–2023)

The US approach to crypto for its first decade was not a regulatory framework. It was an improvisation built on three pillars: SEC enforcement of the Howey Test, CFTC jurisdiction over crypto commodity derivatives, and FinCEN’s Bank Secrecy Act treatment of exchanges as money services businesses.

The Howey Test — the 1946 Supreme Court standard for identifying an investment contract — became the de facto test for whether a digital asset was a security. The SEC’s position, articulated through enforcement actions against Ripple, Coinbase, and dozens of others, was that most tokens issued in initial coin offerings met the Howey standard. The CFTC, meanwhile, asserted jurisdiction over Bitcoin and Ether as commodities under the Commodity Exchange Act, creating a parallel enforcement apparatus whose interaction with SEC jurisdiction was never statutorily resolved.

FinCEN’s 2013 guidance treating crypto exchanges as money services businesses subjected them to Bank Secrecy Act requirements — AML programmes, suspicious activity reporting, customer identification — without addressing their status as securities or commodities intermediaries. The Office of the Comptroller of the Currency issued interpretive letters from 2020 allowing national banks to custody crypto assets and use blockchain networks for payment activities. State money transmission licences, led by New York’s BitLicense from 2015, added another regulatory layer that varied across 50 states.

This patchwork was not without function. It deterred the most egregious frauds, provided some consumer protection, and generated data from exchange reporting. But it created immense legal uncertainty for legitimate participants, subjected companies to multi-agency enforcement risk, and effectively exported capital and talent to jurisdictions with clearer rules.

Congress Tries: The Long Road to FIT21

Congressional attempts to legislate comprehensively began in earnest around 2018. The Token Taxonomy Act, introduced by Representatives Davidson and Soto, proposed to amend the Securities Act and Exchange Act to exclude certain digital tokens from the definition of securities. It did not pass.

The Real Economy Innovation and Prosperity (REIN) Act, the Digital Commodity Exchange Act, the Digital Asset Market Structure and Investor Protection Act — the legislative graveyard of the 2019–2023 period accumulated a long list of crypto-specific bills that received hearings, generated expert testimony, and died in committee.

The key structural obstacle was jurisdictional. The Senate Banking Committee, the House Financial Services Committee, and the House and Senate Agriculture Committees all claimed some stake in crypto legislation — reflecting the underlying SEC/CFTC jurisdiction contest at the agency level. No bill that gave one agency predominance could easily pass committees controlled by allies of the other.

FIT21 — the Financial Innovation and Technology for the 21st Century Act — represented the most serious attempt to cut through this impasse. Introduced in the House in 2024, it proposed a mechanism for assigning jurisdiction based on the decentralisation status of a digital asset’s underlying blockchain. A “digital commodity” — an asset issued on a blockchain that was “functional” and “sufficiently decentralised” — would fall under CFTC jurisdiction. A “restricted digital asset” — one where an affiliated entity controlled the network — would be a security subject to SEC oversight. Critically, assets could migrate from SEC to CFTC jurisdiction as their networks became more decentralised over time.

FIT21 passed the House on May 22, 2024 with a 279–136 vote — a surprisingly bipartisan margin that included 71 Democrats. The Biden administration issued a Statement of Administration Policy opposing the bill, but signalled it would not veto it. The Senate did not act before the November 2024 election.

The Election That Changed Everything: Fairshake PAC

The 2024 election was, by any measure, the most consequential in the history of crypto politics. The Fairshake PAC — a super PAC primarily funded by Coinbase, Ripple, and Andreessen Horowitz’s a16z — raised $202.9 million, making it the largest single-issue financial sector super PAC in American electoral history. Its strategic focus was not on the presidential race but on congressional composition: identifying senators and representatives in competitive primaries or general elections who could be influenced by targeted spending.

Fairshake achieved a 91% win rate across its targeted races. The 119th Congress that convened in January 2025 contained more than 300 members who had publicly committed to supporting sensible digital asset legislation. Senate Banking Committee Chair Tim Scott (R-SC) had been among the most vocal congressional advocates for crypto-friendly legislation. House Financial Services Committee Chair French Hill (R-AR) had co-authored significant crypto market structure proposals.

The political conditions that had blocked legislation for a decade — a divided Congress, a hostile SEC chair under Gary Gensler, a Democratic White House issuing vetoed bills — had fundamentally changed.

The GENIUS Act: What It Says

The Guiding and Establishing National Innovation for US Stablecoins Act — the GENIUS Act — was signed into law on July 18, 2025 after passing the Senate 68–30 and the House 308–122. The bipartisan margins were significant: the GENIUS Act is not a partisan instrument.

The Act’s core provisions establish a dual-track licensing system for stablecoin issuers. Issuers may apply for a federal licence through the OCC or elect to be regulated under a qualifying state regime — provided that state regime meets the federal floor on reserve, disclosure, and consumer protection requirements. Federally chartered banks with OCC approval may issue stablecoins without a separate GENIUS Act licence, subject to existing banking regulation.

Reserve requirements mandate one-to-one backing against a defined set of high-quality liquid assets: US dollars, Treasury securities with maturities under 93 days, repos collateralised by Treasuries, and similar instruments. Issuers must publish monthly attestations of reserve holdings from a registered public accounting firm, with annual full audits for issuers above a specified size threshold.

Redemption requirements establish a right of holders to redeem stablecoins for the equivalent dollar value within prescribed timeframes. AML/KYC requirements impose Bank Secrecy Act obligations on stablecoin issuers and, importantly, extend Travel Rule requirements to stablecoin transactions above de minimis thresholds.

The GENIUS Act does not resolve the status of non-stablecoin digital assets. It explicitly carves out algorithmic stablecoins — assets that maintain peg through algorithmic mechanisms rather than reserve backing — from the permitted categories, a direct legislative response to the TerraUSD collapse of 2022.

The CLARITY Act: Market Structure Unresolved

The CLARITY Act — the successor to FIT21 in the 119th Congress — passed the House on July 17, 2025 with a 294–134 vote. It is pending Senate action. The Act substantially follows FIT21’s approach to the SEC/CFTC jurisdiction question, with refinements to the decentralisation test and the blockchain certification process.

The Senate’s path is uncertain. Senate Agriculture Committee Chair John Boozman (R-AR) and Senate Banking Chair Tim Scott would both need to agree on jurisdictional boundaries that satisfied both committees’ institutional interests. The SEC under Paul Atkins and the CFTC under Brian Quintenz — nominated in 2025 — have signalled willingness to work collaboratively on implementation, reducing the inter-agency friction that previously complicated legislative progress. But the institutional dynamics of the Senate have so far delayed floor action.

Paul Atkins, Project Crypto, and the SEC’s New Posture

Paul Atkins was confirmed as SEC Chair in 2025. A Republican commissioner from 2002 to 2008, Atkins had long been associated with lighter-touch financial regulation. His confirmation was strongly supported by the digital asset industry.

In July 2025, Atkins launched “Project Crypto” — a systematic initiative to review the SEC’s inherited enforcement posture toward crypto. The project established a dedicated crypto task force within the SEC’s Division of Corporation Finance, created new guidance frameworks for token issuers, and signalled a willingness to settle existing enforcement actions on terms more favourable to industry than the Gensler-era posture.

The enforcement-first approach that characterised SEC crypto regulation from approximately 2019 to 2024 — pursuing major platforms and token issuers through Wells Notices and civil suits rather than engaging with rulemaking — is substantively over. The SEC is now engaged in a rulemaking process for crypto asset securities disclosure, custody requirements for investment advisers holding crypto, and broker-dealer treatment of digital asset activities.

The CFTC’s Expanding Role

Brian Quintenz, nominated as CFTC Chair in 2025, is a former CFTC commissioner who left the agency in 2021 to lead crypto policy at a16z. His nomination was widely interpreted as a signal that the CFTC would actively seek to expand its jurisdiction in the digital asset space. The CFTC’s existing spot market authority over Bitcoin and Ether — confirmed in various enforcement actions if not yet definitively by statute — would be significantly expanded under the CLARITY Act if enacted.

The CFTC under Quintenz has moved to develop comprehensive rules for digital commodity spot markets, building on its derivatives market expertise. The convergence of an Atkins SEC and a Quintenz CFTC — both favourably disposed toward digital asset activity — represents the most industry-friendly dual-regulator configuration in the sector’s history.

State-Level Innovation: Wyoming, Texas, and Beyond

While federal stalemate persisted for years, states filled the vacuum. Wyoming enacted a series of statutes from 2019 that created the Special Purpose Depository Institution (SPDI) — a bank charter specifically designed for digital asset custody, with no fractional reserve requirement and a mandate to hold 100% of customer digital assets. Kraken received the first SPDI charter. Wyoming also enacted legislation defining digital assets in property law terms, creating the legal foundation for tokenised asset issuance under state law.

Texas enacted legislation recognising virtual currency in its commercial code. Colorado adopted a Digital Token Act. New York’s BitLicense regime, despite its complexity, created a regulated market that gave institutional participants a compliance pathway. The patchwork of state laws was never going to substitute for federal legislation, but it demonstrated that legal frameworks for digital assets were achievable and generated a body of state-level precedent that informed federal drafting.

The Political Economy of US Crypto Legislation

Understanding the GENIUS Act and the pending CLARITY Act requires understanding the political forces that produced them. The Fairshake PAC operation was not simply a lobbying campaign — it was a restructuring of the electoral incentive landscape. Before 2024, many congressional incumbents calculated that supporting crypto legislation carried meaningful political risk (hostile media coverage, association with fraud, consumer harm narratives). After the Fairshake operation demonstrated that opposing crypto legislation carried meaningful electoral risk (well-funded primary challengers or general election opponents), the calculation inverted.

Traditional financial sector lobbying — from the banking industry, which had initially opposed crypto legislation as an unlevel playing field — gradually shifted as major banks concluded that regulated participation in digital assets was preferable to ceding ground entirely. JPMorgan, Goldman Sachs, and BlackRock’s entry into the space, culminating in BlackRock’s Bitcoin ETF approval and its BUIDL tokenised money market fund, meant that by 2025 the financial establishment was broadly aligned with, rather than opposed to, federal digital asset legislation.

The consumer protection coalition — state attorneys general, consumer advocacy groups, and academics who had raised concerns about retail investor harm — had been weakened by FTX’s collapse paradoxically strengthening the case for regulated frameworks rather than outright prohibition. The political coalitions that might have blocked GENIUS Act-style legislation in 2022 were materially weaker by 2025.

What Remains Unresolved

The GENIUS Act resolved one question — federal stablecoin regulation — that had been politically urgent since the Libra proposal in 2019. It left the larger market structure question open. The CLARITY Act, if enacted, would resolve the SEC/CFTC jurisdiction contest for most digital assets. But several significant areas remain either legally uncertain or actively contested.

DeFi protocols — autonomous smart contract systems without a central issuer or operator — do not fit cleanly into the GENIUS Act or the CLARITY Act framework. The SEC’s view on when a DeFi protocol constitutes an unregistered exchange or broker remains a live regulatory question. The CFTC has similarly not finalised its treatment of DeFi commodity platforms.

NFTs occupy a legal grey zone. The SEC has brought enforcement actions against certain NFT issuers on the basis that particular NFT projects constituted unregistered securities offerings. The CLARITY Act’s treatment of NFTs is limited. State property law treatment of NFTs is inconsistent.

Crypto exchange regulation — particularly the treatment of major centralised platforms as regulated intermediaries with custody, disclosure, and conflict-of-interest obligations — is addressed in the CLARITY Act but will require extensive CFTC and SEC rulemaking to implement in practice.

The US legislative landscape in 2026 is the most favourable for institutional digital asset activity in the sector’s history. The GENIUS Act is law. The CLARITY Act is advancing. The SEC and CFTC are led by chairs disposed toward engagement over enforcement. The congressional composition reflects a decade of political investment by the crypto industry. And yet the most fundamental questions about how digital asset law interacts with property, securities, and payments law are still being written in agency offices, federal courts, and Senate markup sessions.