U.S. Senate Bill Could Grant Major Altcoins Regulatory Relief

The draft ‘Clarity Act,’ released by Senate Banking Committee Chairman Tim Scott, proposes a fundamental shift in how the U.S. regulates digital assets. Its core mechanism is a provision that would classify certain tokens as ‘non-ancillary’ assets, effectively exempting them from being treated as securities under the purview of the Securities and Exchange Commission (SEC). The criteria for this exemption is specific and product-based: a token would achieve this status if, by January 1, 2026, it was the principal asset of an exchange-traded product (ETP) listed and traded on a national securities exchange.

This creates a clear, albeit exclusive, regulatory gateway. Based on existing ETP listings, the provision would immediately apply to XRP, Solana, Litecoin, Hedera, Dogecoin, and Chainlink, placing them in a regulatory category parallel to Bitcoin and Ethereum from the bill’s effective date. As Jamie Elkaleh, CMO of Bitget Wallet, noted, the bill “reflects a broader shift toward regulating crypto assets based on how they are distributed and used within regulated financial products.” The strategy establishes a two-tier system where ETF eligibility becomes a definitive, if narrow, path to regulatory legitimacy for crypto projects.

Experts uniformly emphasize that the immediate impact of such a provision would be institutional, not retail-focused. Market data supports this view; the draft’s circulation prompted only muted gains for the affected altcoins, while Bitcoin traded near $93,000. On prediction market Myriad, the probability of an ‘alt season’ in Q1 saw only a modest increase from 16% to 18%.

The real value lies in compliance clarity. “If this language survives into the final bill, the immediate impact would be less about prices and more about compliance posture,” Jordan Jefferson, Founder of DogeOS, told Decrypt. He explained that “a clearer statutory path out of classification uncertainty can widen the set of institutions that are even allowed to engage.” Lawyer Joshua Chu of the Hong Kong Web3 Association concurred, stating that finalizing the bill would “likely pull XRP, SOL, and DOGE into the same compliance comfort zone that unlocked institutional demand for BTC and ETH.” The primary effect is to remove a major legal overhang, potentially unlocking new avenues for custody, trading, and investment by regulated financial entities.

Despite the blueprint it provides, the provision’s enactment is far from guaranteed. As Joshua Chu cautioned, the “wild card is U.S. politics,” with the bill’s fate tied to the upcoming electoral cycle and the dynamics of a divided Congress. The Senate Banking Committee is scheduled for a critical markup hearing, where the draft will be debated and potentially amended, representing its first major legislative test.

The broader draft text reveals the political trade-offs necessary to advance such legislation. It includes a section protecting software developers—a clear nod to DeFi interests—while notably omitting a contested section on stablecoin yield. These inclusions and omissions highlight the balancing act required to build consensus. The draft of the Clarity Act, therefore, serves as both a potential roadmap for crypto regulation and a snapshot of the complex political negotiations that will determine whether such a pathway becomes law.