United States Senator Cynthia Lummis, a highly visible and influential figure in advocating for and establishing regulation around cryptocurrency, has been continuously engaged in discussing and supporting a legislative proposal that would establish a comprehensive market structure for digital assets. As the Chair of the Senate Banking Committee's Subcommittee on Digital Assets, Lummis has been instrumental in the creation of the "Responsible Financial Innovation Act" ("RFIA"), a bipartisan effort to clarify regulation of the cryptocurrency markets in a forward-thinking, innovation-friendly manner, allowing the markets to function through stability, clarity, and protection for the investor. Following the passage of the Digital Asset Market Clarity Act by the US House of Representatives with a strong bipartisan effort and support, efforts related to the RFIA gained momentum as a foundation for amendments from the Senate in the pursuit of final market structure legislation, continuing discussions in 2025 with the intent of reaching former President Donald Trump's desk for approval.
Lummis and her colleagues put emphasis on harmonizing the approaches to create coherence among the groundwork developed in the House along with the Senate's refinements to centralize issues in a clear framework, addressing regulatory authority delineation between the SEC and CFTC, stablecoin adjudications, and protections for investors. Enabling legislation that provides clarity, the ability to be enforced, and/or promotes innovation is central to the narrative of RFIA, as well as stabilizing crypto markets and providing legal clarity to the participants.
Addressing crypto ATM scams through market structure reform
Senator Lummis has placed particular emphasis on tackling the increasing concerns about scams related to crypto ATMs that have impacted consumers across the country. Although the use of ATMs to buy or sell a cryptocurrency using cash or debit cards has proliferated, these ATMs are often operated in minimally regulated settings that leave consumers vulnerable to fraud, unexpected fees, and deceptive practices across the board. These rising instances of scams coupled with the lack of transparency do little to inspire trust in the movement of digital assets within the United States in the quest for mainstream adoption.
Senator Lummis believes the market structure bill presents an opportunity to address these risk factors by providing regulatory clarity and establishing increased consumer protections. The bill aims to protect consumers while preserving innovation in the digital asset industry by establishing a regulatory framework with clearly defined jurisdiction and regulatory obligations around the transactions associated with digital assets facilitated by ATMs. Some of the ideas proposed include licensing for cryptocurrency ATM operators, know your customer (KYC) practices, disclosure of transaction fees, and more provisions to ensure individuals retain access and control of their private keys.
In addition, the bill takes a collaborative approach with the SEC and CFTC to minimize the risk of regulatory arbitrage that could benefit scammers and impact consumers negatively. The Senator supports a staunch yet pragmatic enforcement policy to ensure all participants in the market—including those citizens using a crypto ATM or tokenizing an asset—are held accountable to appropriate regulations,[thereby reducing the capacity for scams to take root and defraud consumers.
Bipartisan efforts and prospects for passage
Senator Lummis is spearheading a bipartisan regulation of digital assets effort on behalf of her fellow Republicans. Early aspirations were to push legislation through by late 2024, but complex negotiations and discussions pushed that timeline into 2025. Meaningful divergence existed in relation to themes of not only the regulatory structure but also the degree of privacy desired and how to best incentivize innovation in digital assets. However, in spite of the difficulties, Lummis remains hopeful legislation would be passed by the end of the year, and that market structure frameworks would be finalized, given the importance of rational regulation to ensure market stability for issuers and consumer confidence of investors, while ensuring America remains a leader in digital finance.
Working with Democratic Senators, including Kirsten Gillibrand, provide collaborative avenues that demonstrate shared commitment to balanced regulatory oversight. In some cases, as Senate Banking Committee Chair Tim Scott suggested, openness among several Democrats in support of the bill lay ground for potential consensus across party lines. The last steps include harmonization of the Senate legislation with the House passed CLARITY Act, which creates a singular regulatory regime that is market-ready.
If passed, the legislation would bring clarity that is needed for many companies engaged in cryptocurrency issuance, trading, or providing services to do so in a way that strengthens investor protections while promoting an innovative ecosystem.
Key provisions of the market structure bill
Under Lummis’s auspices, the Responsible Financial Innovation Act has expansive provisions that will really shape how digital assets are regulated. It has clear definitions that will help clarify when digital assets will be securities or commodities to help eliminate some of the regulatory uncertainty that has led to many years of litigation and increased compliance costs for institutions in the space.
The bill also includes expanded regulation on stablecoins to enhance financial system safety while allowing growth. Some notable provisions of the bill include: issuer transparency requirements, risk management standards, and restrictions on non-financial entities engaging with the stablecoin market to avoid conflicts of interest.
Consumer protection is also a major priority in the bill, requiring issuer financial disclosures, periodic audits from a third-party accounting firm, as well as liability from the issuer’s senior managers to provide integrity in the market. The bill will also allow peer-to-peer transactions, and self-custody to protect innovation in technology and individual liberties within regulated structures.
Lummis emphasized that the market structure legislation is intended to be a complementary framework to the existing regulatory structures—not an overhaul—with BTC and ETH due to their existing exemptions, and various structures have been agreed to for compliance being consistent across asset classes.
Implications for the cryptocurrency industry and market participants
The market structure bill introduced by U.S. Senator Cynthia Lummis marks a significant turning point in the regulation of digital assets that is focused on bringing transparency, stability, and consumer protections to the rapidly growing cryptocurrency space. Senator Lummis has been at the forefront of advocating for fair and transparent cryptocurrency legislation and has helped design a regulatory framework that is broad enough to address long-standing friction in the industry, reduce uncertainty for investors, and spur innovation while protecting market integrity. The bill will unambiguously establish jurisdictional authority for the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), and create operational standards for digital asset platforms, with the intent to improve regulatory approaches that have historically been inconsistent and contentious.
One of the key advantages of this newly proposed legislative clarity is the implications it will have for the digital asset ecosystem including crypto exchanges, stablecoin issuers, digital asset custodians, and increasingly operators of crypto ATMs. By establishing a predictable regulatory framework, these organizations can significantly de-risk their business models, greatly minimize operational costs, and deploy their operating capital in innovative ways that support growth of the digital assets marketplace. Further, the structured regulatory oversight of the bill supports consumer protection rules that are aimed at reducing fraud, abuse, and manipulation—increasingly important factors to growing the public trust and allowing for mass adoption of cryptocurrency based technologies and services.
The central tenets of the legislation go beyond simple oversight to institutionalize transparency, governance, and accountability by executives in a digital asset ecosystem. The law requires adequately rigorous disclosures, audit practices, and fiduciary duties designed to protect investors and preserve market confidence. In bringing a number of cryptocurrency companies operationally and structurally closer to the governance of the traditional financial system, this legislation welcomes a greater presence of institutional actors in the space, offers a greater degree of integration with traditional finance, actively works to mitigate one of the most significant barriers to the widespread adoption of cryptocurrencies more generally me - that is, an underregulated risky market.
Senator Lummis intentionally took a comprehensive approach to the challenges inherent in consumer protection, reducing fraud, alongside allowing for innovation and technological development to be made freely available. The bill extends the bipartisan framework established in the previous session by virtue of the recently passed Digital Asset Market Clarity (CLARITY) Act, and a robust feedback loop process no doubt occurred with industry leaders, regulatory regimes, and consumer advocates, improving its robustness and political viability, likely predicting that it will be passed by the end of 2025, as she indicated.
A key component of the bill, as Lummis pointed out, is that it may contribute to mitigating impending threats to the creation and future use of cryptocurrency, including crypto ATMs, which have increased dramatically with little or no regulations in place. These ATMs allow people to buy and sell cryptocurrency with cash. It is easy for criminals to exploit people and defraud them because these ATMs are not regulated very much, if at all. The bill suggests there will be monitoring in the way of licensing, consumer protections to enforce and operational requirements to comply with current state laws on anti-money laundering (AML) and know-your-customer (KYC) policies. Also, the emphasis on crypto ATMs in the bill shows the legislation's overarching concern for reckless use of cryptocurrency with an intent to protect vulnerable users and provide more market transparency at all points of transactions in the cryptocurrency economy.
Bipartisan involvement has been instrumental in moving the legislation forward. Senator Lummis has worked extensively with colleagues from both sides of the aisle to balance regulatory authority with state interests for economic improvement. Such senators as Tim Scott, who is the Chair of the Senate Banking Committee, are optimistic about the bill receiving enough bipartisan support to allow the bill to pass into law. This type of bipartisan spirit is essential for the development of a regulatory model because digital assets have a significant and broad impact on today's financial markets and the economy.
The ramifications of the market structure bill are extensive. By providing clear rules about when digital assets are securities versus commodities, the bill reduces competing regulatory claims that have impeded market participants for years. This clarity leads to efficient capital formation, decreased litigation risk, and a clearer road map for product launches and innovation. In addition, the stablecoin provisions within the bill further promote financial stability by adding transparency and required reserves for issuers, mitigating systemic risks associated with the rapid increase in stablecoins.
From the perspective of market participants, clear regulatory guardrails allow for reasonable market innovation and consumer and institutional investor confidence. Furthermore, additional protections against fraud and manipulative practices will reduce some of the risk posed via new market infrastructure. Finally, digital asset exchanges and custodians will have a better operational standard and conduct requirements, making the maturity of the crypto ecosystem more robust.
From an investor perspective, the bill's focus on accountability, and transparent disclosures closes the information asymmetry that typically makes investment decisions difficult. These types of provisions help to bring cryptocurrency market norms in line with traditional markets of securities, easing convergence to global norms. Greater predictability should encourage broader participation by institutions, which could in itself provide additional liquidity and price stability in crypto markets.
In summary, Senator Cynthia Lummis's market structure bill represents a thoughtful, comprehensive vision to regulate an area of finance that is evolving fast and is very complex. By fusing consumer protections, clarity of enforcement, and explicit, and support for innovation, Lummis aims to move the market for cryptocurrency out of the purgatory of regulatory gray space and into a new future of regulatory certainty, legitimacy, and growth. If the bill makes it through the legislative process, and sees itself signed into law sometime in 2025, it will serve as a model for others that wish to find a path for global regulatory frameworks, while simultaneously elevating the United States to a position of leadership in determining how the future of digital asset markets will look.