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- The SEC drafts Token Taxonomy rules as the U.S. pushes to lead global crypto regulation efforts.
- Clarity Act stalls amid disputes over stablecoin limits, DeFi rules, and asset labeling.
- Atkins says SEC and CFTC coordination will set unified oversight once Congress finalizes the bill.
The United States aims to become the world’s crypto capital, SEC Chair Paul Atkins told lawmakers on February 11. He confirmed that the agency is drafting Token Taxonomy guidance while Congress remains stalled on the Clarity Act.
Atkins testified before the Senate Banking Committee. He said the Securities and Exchange Commission is working with the Commodity Futures Trading Commission under “Project Crypto.” The initiative seeks to create a unified system for token classification. It also aims to ensure consistent federal oversight.
The Clarity Act has drawn 137 proposed amendments in the Senate Banking Committee. The volume of changes has slowed progress. Lawmakers, banks, and digital asset firms remain divided. Several provisions continue to face resistance.
Crypto Industry Split on Section 404 Stablecoin Rules
Section 404 has become the most disputed part of the bill. The measure would block stablecoin issuers from offering interest or rewards unless tied to transactions or approved programs. Traditional banks support the restriction. Crypto firms argue it would curb competition and limit product design.
Coinbase CEO Brian Armstrong withdrew support for the legislation, according to reports. He cited concerns about reduced competition. The disagreement reflects broader industry tension over stablecoin policy.
Atkins said the SEC is prepared to implement a federal framework once Congress finalizes the bill. Atkins affirmed the agency’s commitment to innovation and maintaining market integrity. He added that regulatory clarity remains a priority.
The SEC is working on formal Token Taxonomy guidelines. It will be structured in accordance with the Clarity Act. It is intended to establish how tokens will be categorized under federal law.
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The bill introduces the term “ancillary assets.” These tokens may rely on an issuer’s efforts but may not qualify as traditional securities. The provision could shift certain assets away from strict reliance on the Howey Test. Critics warn that the SEC may still retain decisive authority over classification.
The SEC will work with the CFTC to “help clarify the boundaries of oversight,” according to Atkins. He noted the importance of having consistent federal standards. The collaboration is to avoid ambiguity in token regulation.
DeFi Compliance Mandates Raise Privacy Concerns
Proposed amendments also target decentralized finance platforms. The changes would require surveillance and record-keeping measures. They include Bank Secrecy Act compliance and transaction monitoring obligations. Industry groups argue these rules threaten user privacy.
The legislation also allows banks to issue stablecoins under FDIC and Office of the Comptroller of the Currency supervision. Supporters say this provides clear regulatory channels for traditional institutions. Critics question whether crypto-native firms would face stricter treatment.
Meanwhile, the Senate Agriculture Committee passed the Digital Commodity Intermediaries Act. This provides a narrower framework for the definition of digital commodities. There were several bipartisan amendments that failed during earlier votes.
Following a White House meeting on February 10, lawmakers set a March 1 deadline to resolve differences. Senate Majority Leader John Thune may schedule a vote later in the spring if consensus is reached. Atkins reiterated that the SEC will provide guidance as Congress builds a federal crypto framework.
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