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On November 10, 2025, Senator John Boozman (R-AR), Chairman of the Senate Committee on Agriculture, Nutrition, and Forestry, and Senator Cory Booker (D-NJ) released a bipartisan discussion draft building upon the Digital Asset Market Clarity Act of 2025 ("CLARITY Act") passed by the House of Representatives earlier this year. In September 2025, the Senate Banking Committee, which oversees the Securities and Exchange Commission ("SEC"), released the Responsible Financial Innovation Act of 2025 ("RFIA draft") addressing SEC-related matters, as we previously summarized. The Senate Agriculture Committee oversees the Commodity Futures Trading Commission ("CFTC"), and its discussion draft proposes to provide new authority to the CFTC to regulate spot digital commodity trading. The press release accompanying the discussion draft notes that it reflects months of negotiations (including with the Senate Banking Committee) and incorporates agreed-upon policies "that will protect consumers, ensure the stability of our financial markets, and allow American businesses to flourish." The press release also identifies unresolved issues marked in brackets with the senators welcoming feedback from colleagues, stakeholders, and thought leaders. This note provides a summary of the discussion draft, with a deeper analysis to come.
Definitions and Rulemaking
Title I of the discussion draft includes definitions of digital commodity brokers and dealers, as well as their associated persons. The discussion draft also defines qualified digital commodity custodians and calls for rulemaking by the CFTC to permit a digital commodity custodian to be registered as a qualified digital commodity custodian with the CFTC. Additionally, the discussion draft defines "digital asset" as "any representation of value which is recorded on a cryptographically-secured distributed ledger," as well as "digital commodity" as "any fungible asset that can be exclusively possessed and transferred, person to person, without necessary reliance on an intermediary, and is recorded on a cryptographically secured public distributed ledger." The definition of a "digital commodity" does exclude securities but brackets the definition of a "security" for further negotiation. The proposed definition of a "digital commodity" excludes permitted payment stablecoins, banking deposits, as well as commodities and commodity derivatives. Notably, the definitions for blockchain and decentralized finance systems and protocols are bracketed and therefore subject to further negotiation.
Title I of the discussion draft also sets forth provisions regarding rulemaking. For further discussion there is a joint rulemaking by the SEC and CFTC to exempt persons registered with both the CFTC and SEC from duplicative, conflicting, or unduly burdensome provisions, as well as with respect to mixed digital asset transactions and portfolio margining determinations. The discussion draft calls for rules to be promulgated not later than 18 months after enactment and requires the CFTC to conduct rulemaking on conflicts of interest among and across registered entities. The CFTC is called upon to coordinate with foreign regulatory authorities on the application of consistent international standards with respect to the regulation of digital commodities.
Registration Regime
Title II of the discussion draft addresses registration for digital commodity intermediaries and gives the CFTC jurisdiction over digital commodity transactions. While the CFTC would have jurisdiction over a cash or spot agreement, contract, or transaction in a permitted payment stablecoin offered by registered entity as if it were a digital commodity, such jurisdiction would only be for the purpose of regulating the offer, execution, solicitation or acceptance of a cash or spot permitted stablecoin transaction. The CFTC would not have authority nor be able to make any rule or impose any requirements on a permitted payment stablecoin issuer regarding the operation of a permitted payment stablecoin issuer or a permitted payment stablecoin.
Written certification to the CFTC that a digital commodity meets the requirements of the Act prior to being listed or offered for trading on a digital commodity cash or spot market is also required. Such certification would be effective within potentially 30 days (the specific number of days is bracketed in the draft indicating that it is subject to further negotiation) unless the CFTC makes a disapproval decision.
Trading facilities that offer or seek to offer a cash or spot market in at least one digital commodity would also be required to register with the CFTC as a digital commodity exchange and become a member of a registered futures association. The CFTC would be required to prescribe rules for the contents of such an application. Digital commodity exchanges would be subject to the CFTC's core principles and required to establish and enforce compliance with rules addressing: trading, trade processing, participation, operations, monitoring of trading and trade processing, conflicts of interest, disciplinary procedures, governance fitness standards, system safeguards, and risk management procedures. This section also includes provisions regarding listing standards for digital commodity exchanges where digital commodity exchanges will only be permitted to allow trading in a digital commodity that is not readily susceptible to manipulation and would be subject to public information requirements. The CFTC would be required to adopt consumer protection rules that require customer disclosures and the safe treatment of customer assets. Digital commodity exchanges would also be subject to requirements for recordkeeping and reporting, as well as for maintaining adequate financial, operational, and managerial resources. Customer funds would also be required to be segregated with commingling prohibited.
Title II also includes a section on the registration and regulation of digital commodity brokers and dealers, with the CFTC to promulgate rules applicable to registered digital commodity brokers and dealers. Digital commodity brokers and dealers would also be subject to recordkeeping and reporting requirements, as well as newly prescribed business conduct standards. Digital commodity brokers and dealers would have to establish robust and professional risk management systems, procedures to deal with conflicts of interest, designate a Chief Compliance Officer, and segregate funds. Digital commodity brokers and dealers would additionally be required to make disclosures to the CFTC regarding transactions, trading operations, financial integrity protections, as well as other information related to trading in digital commodities. Associated persons of digital commodity brokers and dealers would also be required to register with the CFTC.
As with the definitional section in Title I, the discussion draft notably brackets "decentralized finance," indicating further feedback is sought. The issue of how to regulate decentralized finance is one of the main challenges to overcome with crypto market structure legislation given the strong views of the industry that developers should not be swept into regulations intended for centralized, custodial intermediaries. However, the panacea may come with the SEC's "innovation exemption" that is expected by the end of the year which may address some of these issues.
CFTC Funding and Resources
Proposed Section 8e would address resources for the implementation of this legislation and impose fees to be collected by the CFTC to recover the annual costs of registering digital commodity exchanges, brokers, and dealers, conducting oversight of these entities, and for outreach and education. In determining the fees, the CFTC would consider the volume of business and registration category of the entity. Unlike the SEC, the CFTC's budget currently is based purely upon appropriated funds approved by Congress. This provision allowing the CFTC to collect fees from registered digital commodity firms should significantly enhance the CFTC's staff and resources, which have suffered significant cuts under the current administration.
This section would also provide the CFTC Chairman with expedited hiring authority to appoint individuals with specialized knowledge of digital commodities markets, financial and capital market formation or regulation, financial market structures or surveillance, data collection or analysis, or information technology, cybersecurity or system safeguards.
The discussion draft would also establish the Office of the Spot or Cash Market Digital Commodity Retail Advocate to assist in identifying and resolving significant problems spot or cash digital commodity market retail participants may have and identifying areas where retail participants could benefit from changes in regulations and rules, and analyzing the potential impact of proposed regulations of the CFTC and rules of registered futures associations on retail participants.
Conclusion
The discussion draft from the Senate Agriculture Committee still contains several areas requiring additional input and negotiation, especially with regard to key definitions and DeFi, but does set forth a fulsome framework for registration of digital commodity brokers and dealers with the CFTC and critical funding for the CFTC to carry out its expanded mission. Both the Senate Banking Committee and Senate Agriculture Committee will have to advance their respective bills out of their respective committees and conform their bill to the House's CLARITY Act, but the fact that the discussion draft was released while the government remains shut down reflects the continued push to get crypto market structure legislation across the finish line.
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