Senate Banking Committee Chairman Tim Scott reportedly predicts that 12 to 18 Democrats will support comprehensive crypto market structure legislation.

According to Aug. 19 reports, Scott is conducting individual meetings with Democratic members, including those outside the Banking Committee, to build bipartisan backing for the anticipated September bill introduction.

The South Carolina Republican’s outreach efforts follow the House passage of the Digital Asset Market Clarity Act on July 17, which received support from 78 Democrats in a 294-134 vote.

The House legislation establishes jurisdictional boundaries between the Securities and Exchange Commission and the Commodity Futures Trading Commission while creating registration pathways for qualifying digital asset platforms.

Scott released a discussion draft of the Responsible Financial Innovation Act of 2025 on July 22 alongside Senators Cynthia Lummis, Bill Hagerty, and Bernie Moreno.

The Senate proposal builds upon the House CLARITY Act by introducing ancillary asset definitions, modernized disclosure requirements, and banking provisions that allow financial holding companies to offer digital asset services.

Regulatory framework development

The CLARITY Act directs SEC and CFTC coordination through joint registration processes for platforms listing tokens that meet functional decentralization tests and public float requirements.

Qualifying networks fall outside the securities law scope once they achieve sufficient decentralization metrics.

The legislation establishes token disclosure requirements scaling with market capitalization tiers while requiring issuers conducting US sales to submit initial information statements.

Banking supervisors receive instruction to recognize qualified custodians managing both stablecoins and digital assets under unified segregation and audit standards.

The framework creates coordinated custody requirements for platforms operating spot and derivatives trading under shared regulatory oversight between the two primary federal agencies.

The Senate discussion draft expands these provisions through ancillary asset classifications covering digital tokens that avoid securities designation.

Regulation DA would exempt certain ancillary asset sales from registration requirements for annual proceeds under $75 million, capped over four-year periods.

The proposal refined investment contract definitions under federal law while establishing pre- and post-launch transparency requirements for digital asset issuers.

Senator Lummis emphasized the urgency of regulatory clarity to prevent American innovation migration overseas, stating the legislation will establish clear distinctions between digital asset securities and commodities while modernizing regulatory frameworks.

Senator Hagerty noted that outdated laws and regulatory uncertainty have hindered innovation and left consumers without adequate protections.

Lastly, the Banking Committee issued a Request for Information covering more than 35 topics to support rulemaking processes, with public comments informing final legislation development.

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Grok 4 is a huge leap from Grok 3, but how good is it compared to other models in the market, such as Gemini 2.5 Pro? We now have answers, thanks to new independent benchmarks.

LMArena.ai, which is an open platform for crowdsourced AI benchmarking, has published the results of Grok 4.

We’re talking about Grok 4 API (grok-4-0709), which received about 4k+ community votes and ranks #3 overall in Text Arena. This is a huge leap from Grok 3, which ranked 8th.

According to LMArena’s tests, Grok 4 scores Top-3 across all categories (#1 in Math, #2 in Coding, #3 in Hard Prompts).

Grok 4 was tested with real-world prompts across domains like coding, math, as well as creative writing, and it performed really well:

• Math: #1
• Coding: #2
• Creative Writing: #2
• Instruction Following: #2
• Hard Prompts: #3

However, it is worth noting that the tested model is Grok 4, not Grok 4 Heavy.

While both are reasoning models, Grok 4 Heavy is significantly better.

The numbers could be different with Grok 4 Heavy, which uses multiple agents to think and compare results, but the Grok 4 Heavy model is not yet available on the API platform.

Gemini 2.5 Pro and Claude still remain the best models for coding, but that might change when xAI ships Grok 4 Code in August.

Grok 4 Code is optimised for coding, and we’re also expecting a CLI, similar to Gemini CLI and Claude Code.

Four US-dollar stablecoin issuers hold roughly $182 billion in US Treasury bills, an amount that would slot them 17th on the Treasury Department’s country-by-country league table.

The amount in overnight Treasury-collateralized repos and Treasury-heavy money market funds would put the group between Norway’s $195.9 billion and Saudi Arabia’s $133.8 billion.

Tether’s USDT tops the cohort. Its first-quarter attestation showed $120 billion in Treasuries, while CEO Paolo Ardoino told CNBC in late May that the firm held “more than $125 billion” and continues to expand.

Circle’s May accountant’s report listed $28.7 billion in T-bills and $26.5 billion in overnight repos, for a combined $55.2 billion backing USDC.

First Digital’s May 31 dashboard showed $1.665 billion in FDUSD reserves, 78% of which is held in Treasury bills, amounting to roughly $1.3 billion.

Paxos’ PayPal USD (PYUSD) uses overnight reverse-repo agreements collateralized 97% by Treasuries. It has $878 million outstanding, which implies roughly $880 million in government debt.

According to US Treasury data from April, those positions reach $182.4 billion, enough to leapfrog South Korea and the United Arab Emirates and fall just shy of Norway.

Treasury paper dominates reserves

Issuers buy short-dated government debt because it settles T-plus-zero at clearing banks, offers daily liquidity, and earns yields now above 5%. 

Tether’s latest assurance showed that Treasuries, repos, and Treasury-only money-market funds represented more than 80% of its collateral, helping drive $1 billion in first-quarter profit.

Circle uses BlackRock’s SEC-registered Circle Reserve Fund to hold its bills and repos, enabling same-day liquidation if redemptions spike.

Ardoino said that issuing stablecoins “creates incremental demand for US debt without relying on the banking system,” citing Tether’s ranking above that of Germany, the UAE, and Spain.

Circle and Paxos have made similar arguments in policy filings, noting that narrowly distributed, highly liquid collateral protects holders during market stress.

Regulatory backdrop

Lawmakers in Washington and Brussels are considering bills that would restrict reserve assets to cash and short-term Treasury securities, maintaining the current composition but limiting diversification into gold or corporate bonds. 

The GENIUS Act, which cleared the Senate in June, would formalize those limits. At the same time, Europe’s Markets in Crypto-Assets (MiCA) regime already bars commodities for euro-pegged coins. 

Stablecoin treasurers say the proposed rules align with their investment profile, though they warn that concentration in one asset class links stablecoin liquidity to Federal Reserve funding conditions.

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