Crypto 2.026
A summary of the Digital Asset Market Structure Discussion draft, and what it could mean for broker dealers and crypto regulation
After years of regulatory uncertainty, the U.S. is finally moving closer to robust crypto regulations that will provide a framework for issuers, investors and intermediaries to compliantly support this asset class and the innovation it brings with it. I was very encouraged to read the draft of the new Digital Asset Market Structure bill that was released by the House Committee on Financial Services & House Committee on Agriculture. This is essentially a new iteration of the Financial Innovation and Technology for the 21st Century Act (FIT21) which passed the House last year, but with significant improvements:
My key takeaway was that whereas FIT21 explicitly aimed to bifurcate oversight between the SEC (for digital assets clearly defined as securities) and the CFTC (for digital commodities), the 2025 Market Structure draft emphasizes a more collaborative, shared oversight model, where the SEC and CFTC are expected to coordinate closely, particularly through joint rulemaking and regulatory frameworks. Each agency takes the lead in different regulatory functions—such as investor protection (SEC) or market integrity and trading practices (CFTC)—but with clearer cooperation and overlap between their roles. For an asset class that can range represent securities, commodities, utilities, payments, or even collectibles this collaborative approach makes a lot more sense. (And, perhaps this could also serve as a model for other parts of financial services).
In addition to the collaborative oversight approach, the new draft introduces several critical enhancements:
Refined Decentralization Criteria: The 2025 draft provides more detailed criteria for determining when a digital asset's underlying blockchain is considered "decentralized," thereby qualifying the asset as a "digital commodity" under CFTC jurisdiction. This refinement aims to reduce ambiguity in asset classification.
Enhanced Disclosure Requirements: The new draft imposes stricter disclosure obligations on digital asset developers, including detailed information about the asset's source code, economics, development plans, and associated risks. These requirements are designed to bolster investor protection and market transparency.
Exclusion for Decentralized Finance Activities: A significant clarification in the 2025 draft is the explicit provision that DeFi activities are excluded from the Bill, and it provides a right for individuals to self-custody their digital assets.
At Texture, we have previously argued[1] that SEC-registered broker dealers should be permitted to offer crypto trading to customers alongside traditional securities and tokenized RWA. Thus, I was pleased to read that this will likely be supported as laid out in the draft. This would be possible via an additional registration with the CFTC. Furthermore, the draft specifically requires that the SEC devise rules (within 270 days) to permit Alternative Trading Systems (such as the Texture ATS) to trade digital commodities and stablecoins as well as securities, and to allow for real-time settlement. This last part is very important, and it will be interesting to see how the final rules will be defined, but in our opinion, real-time settlement would involve the use of smart contracts to facilitate an atomic swap[2]. This innovation has the potential to deliver increased efficiency, reduced counterparty risk, and reduced cost of capital. Leveraging the power of blockchain technology in this way has tremendous potential to streamline workflows throughout capital markets.
As for the new SEC, they are certainly not letting the grass grow under their feet when it comes to crypto regulation. They have been soliciting industry feedback from a series of crypto roundtables, and are thoughtfully considering what new rules or exemptive relief are required. With the final market structure bill targeted for August[3], and rule-making already in the early stages at the SEC, it is likely that the landscape for crypto trading will be profoundly different by 2026, with broker dealers finally able to offer investors access to crypto, stock and bonds through the same regulated entity, with trading occurring on an ATS, settled instantly vs stablecoins. When that happens, the regulatory environment will have finally aligned with industry innovation—unleashing entrepreneurs, empowering established market participants, and solidifying the U.S. as the global leader in crypto markets.
[1] https://www.texture.capital/insights/ctf-roundtable-remarks
[2]See our arguments for smart contract settlement here, item 3: https://www.sec.gov/files/memo-texture-capital-021325.pdf
[3] https://www.americanbanker.com/news/emmer-commits-to-stablecoin-legislation-by-august