A newly added clause in the Senate’s cryptocurrency legislation aims to prevent tokenized stocks from being classified as commodities, potentially creating significant regulatory hurdles for crypto companies.
The amendment was introduced on Friday as part of the draft of the 2025 Responsible Financial Innovation Act. Its primary purpose is to establish a clear distinction, preventing stocks tokenized on a blockchain from exploiting commodity classification loopholes.
This development follows comments made by Wyoming Senator Cynthia Lummis on CNBC, who indicated the Senate’s desire to finalize the bill swiftly. She stated the goal is to have it approved by the President before the year’s end.
This refers to President Donald Trump, who has already enacted the stablecoin bill into law this past July after both the House and Senate approved it over the summer. However, this new legislation represents a more substantial challenge for crypto businesses such as Coinbase and Ripple, as it will define the boundaries between securities and other asset types.
The House passed its version of the market structure bill earlier in July. The Senate is still finalizing its version. The two versions will need to be reconciled before the final draft is presented to Trump for approval. This is where potential disagreements may arise.
Senate plans committee votes and full vote by November
Senator Lummis has indicated that the Senate Banking Committee is scheduled to vote on the segment of the bill pertaining to the Securities and Exchange Commission later this month.
The Senate Agriculture Committee, which oversees the Commodity Futures Trading Commission, is expected to vote in October. A full Senate vote could occur as early as November, Lummis confirmed.
While Democratic support is not yet secured, Lummis claims that discussions are underway. She stated that efforts are being made to pair Democrats and Republicans on specific aspects of the bill to ensure significant bipartisan agreement on key issues where feasible.
Even with full Republican support, at least seven Democratic votes are needed for the bill to pass. A Senate Banking Committee spokesperson reportedly told CNBC that the current version of the bill “reflects feedback from hundreds of stakeholders on a wide range of questions.”
This input has been crucial in shaping the specific regulatory division between securities and commodities, particularly concerning assets transferred onto blockchain networks.
As the Senate works to establish clear definitions, Galaxy Digital, a crypto firm listed on the Nasdaq, is actively exploring the possibilities within the current framework. On Wednesday, Galaxy announced that its SEC-registered GLXY shares could now be tokenized directly on a public blockchain using the Opening Bell platform, which was developed by the crypto startup Superstate.
Galaxy stated that shareholders can now tokenize their shares and transfer them to approved digital wallets, subject to Know Your Customer (KYC) verification. These tokenized shares could also be traded on Decentralized Finance (DeFi) platforms utilizing Automated Market Makers (AMMs), providing increased liquidity and flexibility.
Superstate asserts that these are not synthetic or wrapped tokens but rather direct equity issuances on the blockchain.
The Opening Bell platform launched in May and initially supported the Solana blockchain. It is marketed as the pioneering platform offering SEC-registered public shares directly on blockchain infrastructure, removing the necessity for intermediaries or token wrappers.
Mike Novogratz, the Founder and CEO of Galaxy, stated that the objective is to integrate successful crypto concepts into traditional markets. In his words:
“We are pleased to partner with Superstate to help establish the foundation for an on-chain capital market that effectively connects traditional equities with next-generation infrastructure. Our vision is a tokenized equity that harnesses the best aspects of crypto – transparency, programmability, and composability – and integrates them into the traditional financial landscape. We are actively contributing to the development of a model that can be scaled, not only for Galaxy but also for the broader market.”
Last month, Galaxy disclosed its collaboration with Superstate to investigate the tokenization of its GLXY shares. That initiative is now operational.
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