Senate Republicans Revive CFTC-Led Crypto Bill After Coinbase Mutiny

The Digital Commodity Intermediaries Act, spearheaded by Chairman John Boozman, aims to strip the Securities and Exchange Commission (SEC) of its primary oversight role in favour of the Commodity Futures Trading Commission (CFTC).

Retaliation for the CLARITY Act collapse

The release follows the high-profile failure of the Senate Banking Committee’s version of the Digital Assets Clarity Act on 14 Jan. As reported by Sandmark, that earlier bill was pulled from a scheduled markup after Coinbase CEO Brian Armstrong publicly withdrew support, citing "11th-hour" amendments that would have restricted stablecoin rewards. Armstrong later clarified in a Davos interview with Bloomberg that the draft contained "too many giveaways to TradFi."

By moving the bill through the Agriculture Committee, which has jurisdiction over the CFTC, Republicans are attempting to bypass the gridlock in the Banking Committee. Boozman confirmed in an official statement that the committee will move to a formal markup on 27 Jan, signaling that Republicans are willing to advance a "CFTC-first" framework even without immediate Democratic co-sponsors.

The digital commodity power grab

The draft focuses on establishing the CFTC as the exclusive regulator for spot markets in "digital commodities." Crucially, the legislation sharply limits the SEC's reach, preventing the agency from regulating secondary-market trading of digital assets unless they carry explicit investment contract rights.

The bill’s core provisions include:

• CFTC Spot Authority: Grants the agency primary oversight of non-security digital asset trading venues.
• Exchange Registration: Mandates that brokers, dealers and exchanges register with the CFTC, similar to the framework for futures markets.
• DeFi Exemptions: Specifically carves out non-custodial decentralized finance (DeFi) protocols and open-source developers from registration requirements.
• Stablecoin Exclusion: Explicitly excludes "permitted payment stablecoins" from the CFTC’s market structure oversight, deferring to existing banking standards.

Political reality and the midterm horizon

Despite the renewed momentum, the bill faces an uphill battle. With no Democratic co-sponsors, the draft is unlikely to pass a full Senate vote in its current form. However, it serves as a critical marker for Republican policy ahead of the 2026 midterms, setting a baseline for what a "crypto-friendly" Congress might look like.

Opponents, including several senior Democrats, argue that the bill’s "digital commodity" definition is too broad and could allow traditional securities to evade investor protection laws. For institutional investors, the bill represents the continued splintering of US policy: one path led by the SEC’s enforcement-heavy approach, and another, led by Senate Agriculture, that treats crypto as a new asset class entirely.