Senator Lummis Champions Framework for Regulated Crypto Markets Amid Offshore Shift

The U.S. crypto industry faces a persistent challenge: regulatory uncertainty has become the industry’s invisible exodus. For years, the lack of clear guidelines has incentivized digital asset firms to relocate operations to jurisdictions with more transparent regulatory frameworks. Senator Cynthia Lummis is now leading a bipartisan effort to reverse this trend by establishing comprehensive rules for regulated crypto markets, aiming to keep innovation and capital investment within American borders.

The Problem: Regulatory Ambiguity Driving Innovation Overseas

Lummis highlighted the core issue in recent statements: vague and fragmented oversight has created a compliance nightmare for domestic companies. When regulators send mixed signals about which agencies hold authority over different asset types, firms face impossible choices—comply with contradictory guidance or relocate offshore. This regulatory arbitrage has already cost the U.S. significant innovation talent and capital deployment. By contrast, nations with clearer frameworks have begun attracting the projects and talent that might otherwise have stayed in America.

The proposed legislation directly addresses this gap by establishing which regulator oversees which assets—a foundational requirement for any functioning market infrastructure.

Proposed Solutions: Clear Jurisdiction Between SEC and CFTC

The bipartisan digital asset bill would accomplish what years of piecemeal rulemaking could not: it would explicitly define the roles of the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) in regulated crypto ecosystems. Rather than letting agencies compete for authority, the legislation draws functional lines based on asset characteristics.

Securities regulators (SEC) would oversee tokens that function as investments or debt instruments, while commodities regulators (CFTC) would handle assets without investment contracts or payment claims. This distinction brings clarity to token projects seeking to launch in the U.S. market, allowing developers to understand their compliance obligations upfront rather than discovering them through enforcement action.

Beyond defining jurisdiction, Lummis also advocates for targeted relief measures. Her proposed Bitcoin ACT would authorize the federal government to purchase up to one million Bitcoin as a strategic national reserve—a long-term store of value approach. Additionally, she backs a bill exempting crypto transactions under $300 from capital gains taxation, acknowledging that retail adoption requires reducing transactional friction for everyday use.

Banking Integration: Expanding Services Under Federal Oversight

A significant component of the framework involves bringing traditional financial institutions into regulated crypto participation. The proposed legislation would permit major banks to offer custody, staking, and payment services for digital assets—but crucially, under existing federal banking supervision rather than ad hoc regulatory guidance.

This approach serves multiple interests: consumers gain access to crypto services through trusted financial institutions; banks can diversify revenue streams within a predictable framework; and regulators extend consistent oversight to the sector. By channeling crypto services through the banking system, the legislation creates a clear supervisory perimeter that eliminates the regulatory shadows where compliance becomes unclear.

Timeline and Stakes: What’s Next for Crypto Regulation Before 2027

Senator Lummis has confirmed her Senate term concludes in 2027, and she has signaled that advancing crypto legislation remains her priority during this final period. The urgency is real: other nations are not waiting. The European Union’s MiCA framework, Singapore’s regulatory clarity, and other jurisdictions’ proactive approaches are already attracting crypto projects that might otherwise develop in America.

The pending legislation will face the typical congressional hurdles—competing priorities, regulatory agency input, and industry lobbying. However, growing consensus among lawmakers from both parties suggests the political appetite for regulated crypto frameworks is strengthening. If enacted before the 2027 deadline, the bill could fundamentally reshape how digital assets operate in American markets, transforming regulatory ambiguity into structural certainty and potentially reversing the offshore migration that has defined recent years.