Key leaders in the House have taken a fresh stab at writing a comprehensive scheme to regulate cryptocurrencies in the U.S.

Why it matters: The question of which digital assets are subject to securities laws, and which aren't, has been a significant point of friction.

Driving the news: A 212-page bill was released yesterday as a discussion draft. A version of the critical and much anticipated "market structure" legislation, it defines which tokens or coins fall under the jurisdictions of the CFTC and the SEC, and how a digital asset can graduate out of a more restricted SEC-oversight to become a digital commodity.

• Things got off to a rough start today, however:

The latest: A joint hearing on digital-asset legislation had been scheduled for this morning between the House Ag and Financial Services subcommittees. Joint hearings, though, require unanimous consent under House rules. And Rep. Maxine Waters (D-Calif.) objected, so no hearing.

• 🥊 Friction point: When Rep. Stephen Lynch (D-Mass.) attempted to make comments on her objection, raising the idea of conflicts of interest between the legislation and "President Trump and his family's personal crypto ventures," it got very tense between him and the hearing chair, Rep. Bryan Steil (R-Wisc.).

What's in the bill

The draft legislation creates a path for issuing a digital asset, selling it and raising funds without it being defined as a security under the federal Securities Act.

• Groups issuing new digital assets that they intend to decentralize would have a process for progressively decentralizing a system.
• Teams that believe their blockchain system has matured — such that it's not under the control of any single entity — would be required to make a certification to the commission with various disclosures.

If a digital asset is determined not to be a security, that doesn't mean the trading of it won't be regulated.

• For example, the draft legislation defines a number of disclosures any new issuer has to make to regulators, continuing the tradition of a disclosure-based regime in the U.S.

In addition, it carves out blockchain validators, developers of software for interacting with blockchains, and other incidental services from financial regulation.

• This has been an issue, such as with the DeFi broker rule that Congress just rescinded.

The big picture: U.S. securities laws were designed for familiar assets like stocks and bonds, but not so much for decentralized networks — because they didn't exist until Bitcoin.

• The crypto industry has long argued for the U.S. to establish a top-to-bottom regulatory scheme that fostered innovation, while still providing investor protections.
• "America needs to be the powerhouse for digital asset investment and innovation. For that to happen, we need a commonsense regulatory regime," Rep. Dusty Johnson (R-S.D.), chair of the House Ag subcommittee that covers digital assets, said in a statement.

The bottom line: This is a very complex piece of legislation, and there's going to be a lot of discussion here and a lot of changes — if and when the bill is eventually discussed.

Go deeper

Senate Dems are unveiling a sweeping new proposal to ban presidents, lawmakers and their families from issuing, endorsing or sponsoring crypto assets, Axios has learned.

Why it matters: Concerns over the Trump family's crypto ventures are threatening to hold up crypto legislation in both houses of Congress.

• Sens. Jeff Merkley (D-Ore.) and Elizabeth Warren (D-Mass.) said in a private meeting last week, first reported by Axios, that the GENIUS Act, the Senate's first-ever stablecoin regulation, lacks basic guardrails against corruption.

Driving the news: Merkley will introduce the End Crypto Corruption Act today, which would ban the president, vice president, members of Congress and their immediate families from issuing digital assets, such as meme coins and stablecoins.

Go deeper

Meanwhile, Banking committee Democrats led a push for refining GENIUS this past weekend.

Why it matters: The Senate bill on stablecoins, the GENIUS Act, is basically the reason that big institutions are tripping over each other to get into the stablecoin rush.

Driving the news: It looked like the big stablecoin bill from Sen. Bill Hagerty (R.-Tenn.) would get voted on in the upper chamber this week, but that now seems far from certain.

• Sen. Ruben Gallego (D.-Ariz.) said in a statement Saturday with eight of his colleagues that the bill needs more work.
• Four of the senators had voted for it in the Banking committee. Sen. Chuck Schumer, the minority leader, has also urged Democrats to go for more.
• As noted above, other Democrats are going further.

State of play: Republicans control the Senate, but they'd need at least seven Democratic votes to close debate on the legislation.

The intrigue: The GENIUS bill under discussion is not quite the same as the bill that got voted out of the Senate Banking Committee.

• The majority leader allowed (under Rule XIV, a new one for me) a somewhat revised bill, still introduced by Hagerty, to skip going back through the committee before coming to the floor. The changes were aimed at winning over Dems, according to Politico.
• So while Senate Banking voted through S. 919 in March, the legislation under discussion is S. 1582. (As of this writing, the text of the new bill has not been posted to Congress' legislative tracker.)

The latest: Majority Leader John Thune (R-S.D.) told reporters yesterday that he's open to floor amendments from the Democrats.

💭 Our thought bubble: Until something passes, the nearly $200 billion committed to stablecoins remains in a regulatory gray area.

• It wouldn't be quite right to say consumers have no protection, but what protection they have is fuzzy.

🪨 New Hampshire's governor signed a law today permitting the state to invest in cryptocurrency. (@KellyAyotte — X)

🎢 All-time high alert: in mentions of blockchain and other digital asset keywords in SEC filings. (The Block)

💵 An Abu Dhabi state fund says it will use World Liberty Financial's stablecoin, USD1, to invest in Binance. (New York Times)

🤺 Samourai Wallet defense lawyers in its money laundering case claim the government failed to disclose exculpatory evidence. (CoinDesk)