U.S. Senate moves to close loopholes in tokenized equities regulation
The U.S. Senate has added a new clause to the Responsible Financial Innovation Act of 2025 that prevents tokenized stocks from being classified as commodities, a move aimed at closing regulatory loopholes.
The provision, introduced Friday, ensures equities placed on blockchain rails will remain under securities law, limiting the scope of firms attempting to treat them like commodities, reports Cryptopolitan.
Senator Cynthia Lummis (R-WY), one of the bill’s main sponsors, told CNBC that lawmakers want the legislation finalized quickly, with the goal of sending it to President Donald Trump before year-end. The update comes just weeks after Trump signed the stablecoin bill into law, setting the stage for the most significant regulatory overhaul for crypto markets yet.
Senate committees prepare votes before year-end deadline
The Senate Banking Committee is expected to vote this month on sections of the bill covering the Securities and Exchange Commission, while the Agriculture Committee, which oversees the Commodity Futures Trading Commission, is scheduled for an October vote. A full Senate floor vote could follow in November, according to Lummis.
The House already passed its version of the market structure bill in July, meaning both chambers will need to reconcile differences before a final draft reaches Trump’s desk. While Republicans are united behind the measure, at least seven Democratic votes will be needed for passage. Lawmakers say the current draft reflects feedback from “hundreds of stakeholders,” with much of the debate centered on drawing clear boundaries between securities and commodities in digital markets.
Galaxy tests limits with tokenized SEC-registered shares
Even as lawmakers work to finalize definitions, Galaxy Digital has begun testing the regulatory boundaries. On Wednesday, the Nasdaq-listed firm announced that its SEC-registered GLXY shares can now be tokenized directly on a public blockchain via the Opening Bell platform, developed by Superstate. The system allows shareholders to tokenize equity, transfer it to KYC-approved wallets, and potentially trade it on DeFi platforms using Automated Market Makers. Unlike wrapped or synthetic assets, Superstate says these are direct equity issuances onchain.
Galaxy CEO Mike Novogratz said the project aims to merge “the best of crypto — transparency, programmability, and composability — into the traditional world.” The development underscores how tokenization is already advancing in practice, even as Washington scrambles to draw new legal lines.
Recently we wrote that senator Kirsten Gillibrand (Democratic Party) from New York has introduced legislative changes on the issue of regulating stablecoins.
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