Democrat lawmakers have introduced a comprehensive legislative blueprint aimed at reshaping U.S. digital asset regulation, proposing to close longstanding gaps in crypto oversight and restore investor confidence in the nearly $4 trillion market, according to a newly released framework.

The proposed plan would grant the Commodity Futures Trading Commission (CFTC) full jurisdiction over spot markets for digital commodities, tokens that do not qualify as securities, resolving the regulatory ambiguity that has left both businesses and investors without clear protections.

It also calls for the CFTC to be given new registration and enforcement authority, as well as mandatory disclosures and consumer protections for crypto trading platforms.

Tackling misconduct

The framework sets out seven core pillars for digital asset legislation, including clarifying token classification, adapting securities rules for token issuers, bringing crypto platforms under exchange-like regulation, and strengthening illicit finance safeguards.

It proposes a dual approach, empowering the SEC to integrate tokenized securities into existing disclosure regimes while instructing the CFTC to police non-security digital assets.

Both agencies would gain expanded funding and authority to regulate custody, margin, and conflicts of interest under crypto-native business models.

Significantly, the framework calls for new controls to prevent public officials from abusing digital asset projects.

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It references President Donald Trump’s financial entanglements with crypto initiatives and seeks to bar elected officials and their families from issuing or profiting from tokens while in office, as well as mandates disclosure of all digital asset holdings.

DeFi and stablecoins

The bill also directs regulators to build new oversight models for DeFi protocols and to safeguard traditional markets from the destabilizing effects of unregulated innovations. It reiterates prohibitions on stablecoin issuers offering interest-bearing products, a provision preserved from the 2025 GENIUS Act.

To prevent criminal exploitation of the digital ecosystem, the framework mandates that all digital asset intermediaries, including those abroad serving U.S. customers, register with FinCEN and comply with anti-money laundering and sanctions obligations. DeFi protocols will also be scrutinized for compliance vulnerabilities.

Finally, the proposal highlights the need for bipartisan regulatory leadership. It would require the SEC and CFTC to maintain cross-party commissioner quorums for rulemaking and enable rapid hiring of staff with digital assets expertise.

According to the authors:

“This framework represents a turning point. It restores trust, prevents abuse, and ensures that America—not its adversaries—leads the next generation of financial innovation.”

Mentioned in this article

US Democratic lawmakers, led by House members Maxine Waters and Stephen Lynch, announced on July 11 that next week will be designated “Anti-Crypto Corruption Week.”

The initiative aims to unite Democrats in opposing several pro-crypto bills that are currently under consideration in Congress, including the GENIUS Act, the CLARITY Act, and a proposed law aimed at preventing the creation of a central bank digital currency (CBDC).

The push against these crypto legislations comes as Washington prepares for the “Crypto Week,” during which lawmakers hope to finalize these bills. Proponents of the proposals argue that they could reshape the crypto landscape and further cement the US’s status as a leader in the sector.

Anti-crypto corruption week

In their joint statement, Waters and Lynch argued that it may lead to fraud and entrench controversial crypto ventures linked to President Donald Trump.

According to Waters, these bills could allow bad actors to exploit the system, furthering Trump’s alleged corrupt activities that have benefited him and his allies financially.

She also criticized the legislation for lacking consumer protections and national security safeguards.

According to her:

“The irony couldn’t be more glaring: the same Republicans who rail against a government-backed digital dollar in the name of ‘freedom’ are now rushing to hand over the keys to Americans’ financial future to Trump’s illegal and corrupt crypto empire.”

Waters concluded that the bills would approve activities undermining trust in the US financial system.

She added:

“Republicans are sending a clear message to the American people that they are unwilling to stand up to the crypto lobby, and even more disturbingly, that they are too cowardly to stand up to the President. Well, Democrats are not afraid, and will spend this week reminding the public of the true cost of this corruption.”

Lynch also echoed similar views in his statement, warning that the Anti-CBDC bill could slow US research into digital currencies, giving countries like China an upper hand in the emerging technology.

He said:

“The volatile and risky nature of crypto products and the lack of investor protections will likely have devastating consequences on Americans’ financial lives, and Congress cannot allow it to undermine our traditional financial markets which are the envy of the world.”

Notably, the Democratic lawmakers’ position is consistent with their broader skepticism toward the crypto industry.

For context, Connecticut’s Democratic-majority legislature recently passed a law banning state agencies from investing in digital assets, which Governor Ned Lamont signed into law.

Nationally, prominent Democrats such as Senator Elizabeth Warren continue to voice concerns about the risks associated with cryptocurrencies, reinforcing the party’s caution towards the emerging sector

Mentioned in this article

China’s JD.com and Ant Group are pressing the central bank to permit yuan-based stablecoins to counter the rise of U.S. dollar-linked digital currencies, Reuters reported on Friday.

They propose launching stablecoins in Hong Kong backed by the offshore yuan, aiming to boost the Chinese currency’s global role.

Both firms already plan to issue Hong Kong dollar-backed stablecoins once local legislation begins August 1.

However, JD.com is advocating for offshore yuan stablecoins as a strategic move to support yuan internationalization. The push reflects China’s broader ambitions to challenge U.S. dominance in digital finance and expand the reach of its currency globally.

China has a long-standing ban on cryptocurrency transactions, which extends to most private stablecoins. This ban, particularly intensified in 2021, was motivated by concerns over financial crime, capital flight, and potential threats to financial stability.

As a counter, China poured resources into developing and piloting its own digital yuan (e-CNY). This central bank digital currency (CBDC) is seen as a way to modernize its payment system and exert greater control over its financial landscape.

Read more: Jack Ma’s Ant International Seeks Stablecoin Licenses in Hong Kong, Singapore: Bloomberg

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United States Senator Cynthia Lummis (R-Wyo.) says elements of the nation’s uniformed leadership are now “big supporters” of plans to build a Strategic Bitcoin Reserve (SBR), marking the first time a sitting law-maker has publicly claimed high-level military backing for the project.

Bitcoin Reserve Gains Military Support

“There are generals, especially in Southeast Asia, who believe it is important to have strategic Bitcoin stockpiles, because we are in an economic war with China,” Lummis told Bloomberg Television late Tuesday. “All we need to do is look to the leadership of the current US military to find support for a Strategic Bitcoin Reserve.”

Lummis reiterated her plan to accumulate 1 million BTC — roughly 5 percent of the supply — and hold it for twenty years. “My purpose is to… illuminate half of the US debt,” she said. The senator’s first funding tranche would rely on Bitcoin already in federal custody: “The place to start is to use the money held by the US Marshals Service… asset-forfeiture monies in the form of digital assets. That can be the basis for year one of a strategic Bitcoin reserve.”

Lummis’ remarks land two months after President Donald Trump issued Executive Order 14233, creating a SBR capitalised with all BTC forfeited in federal cases and instructing agencies to transfer their holdings to Treasury-run cold wallets.

The House and Senate are now considering companion “BITCOIN Act” bills that would codify the reserve in statute and authorise Treasury to purchase additional coins with “no incremental cost to taxpayers.” Even so, Lummis conceded legislation to expand or finance the reserve directly is unlikely to surface this session.

“I don’t think we’re going to get to this bill in 2025, because our next priority is market-structure,” she said, referring to the looming fight over jurisdictional boundaries between the Securities and Exchange Commission and the Commodity Futures Trading Commission.

Responding to concerns that a BTC build-up might displace bullion, Lummis stressed she has “never proposed selling any of our gold or hard assets.” Instead she would re-value Treasury’s 1934-vintage gold certificates at fair-market prices and swap the accounting uplift into BTC: “convert[ing] our gold certificates to current fair-market value and use those to convert to Bitcoin.”

Asked about JPMorgan Chase chief Jamie Dimon’s call for Washington to hoard “bullets, drones and rare earths” instead of BTC, the senator fired back: “Even the United States military disagrees with him… We have to prepare for a guns-and-bullets war, but we need both.”

Notably, Lummis wants the reserve to be Bitcoin-only. “Bitcoin is based on proof-of-work,” she argued, indicating no appetite to diversify into proof-of-stake assets or stablecoins at the sovereign-reserve level.

At press time, BTC traded at $105,494.

Featured image created with DALL.E, chart from TradingView.com

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Cryptocurrency analyst Benjamin Cowen is warning that a weakening stock market may cause Ethereum (ETH) to retest lower price levels.

In a new strategy session, Cowen tells his 889,000 YouTube subscribers that the S&P 500 may continue to show weakness in April, which, based on historical precedence, may result in ETH also declining.

“What I’m wondering is what happens if you do see the S&P 500 continue to show weakness into early to mid-April? Remember, we said there’s going to be weakness by the stock market between February OPEX (Option Expiration Week) and March OPEX. We got that, but I also said there’s a possibility that it could extend into early to mid-April as well before there’s a larger counter-trend rally.

And the reasons for that could be due to tariff uncertainty on April 2nd. It could also just simply be due to, there’s a lot of macro data coming out in early to mid-April that I think the markets are going to be interested in. And one of the reasons I think the markets are going to be interested in it is because with all these tariffs, it could potentially have an effect on inflation.”

Cowen says ETH may drop to its logarithmic trendline, potentially as low as $1,044, amid recessionary pressures, before reclaiming the $3,000 level as support.

“I’m just looking over here at ETH/USD [on the weekly chart], and I see a triple top, and I just have to wonder does it ultimately culminate in a recession, where everyone thinks that by the time the recession is declared it’s over, but the reality is the market was pricing it in well ahead of time, so that you get this big drop and then a big move out of it. We’ve been talking about that for a while, and it’s the whole idea that ETH goes home.”

ETH is trading for $1,909 at time of writing, up 4.7% in the last 24 hours.

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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

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