US Senators Unveil Over 75 Amendments to Landmark Crypto Bill: Targeting Yield and DeFi Rules

In a major development for the crypto world, to a key . These changes focus heavily on hot topics like yield generation and decentralized finance (DeFi). This move shows how lawmakers are working to shape the future of digital assets in the US.

The bill in question is the Financial Innovation and Technology for the 21st Century Act, or FIT21. It passed the House of Representatives earlier this year. Now, it’s up for debate in the Senate. With so many amendments, the path forward looks bumpy but full of promise for clearer rules.

What is FIT21 and Why Does It Matter?

FIT21 aims to create a clear framework for crypto. It divides oversight between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). The SEC would handle most tokens as securities, while the CFTC gets digital commodities like Bitcoin.

This bill could end years of confusion. Crypto firms have struggled with unclear rules. A strong framework might bring more investment and innovation to the US. But senators want tweaks to make it even better.

The Flood of Amendments: Over 75 Proposals

Senators have filed . That’s a lot! They cover many areas, from consumer protection to market rules. Some aim to close loopholes, others to protect innovation.

• Yield Sections: Amendments target how crypto platforms offer yields. Lawmakers worry about risks like those in past collapses. They want strict rules on who can offer yields and how.
• DeFi Sections: DeFi is a big focus. Proposals look at decentralized exchanges (DEXs) and lending protocols. Senators want to define what counts as DeFi and how to regulate it without killing growth.
• Other Key Areas: Changes also hit stablecoins, NFTs, and custody rules. Some push for better anti-money laundering (AML) checks.

These amendments show a balance. Lawmakers want safety but also room for crypto to grow.

Deep Dive: Amendments on Yield Generation

Yield farming and staking are popular in crypto. Users lock tokens to earn rewards. But risks are high. The Terra collapse in 2022 wiped out billions.

Senators’ amendments seek to classify yield products. Some might fall under securities laws. This means more paperwork for platforms. But it could build trust with everyday users.

Key Insight: Clear yield rules might attract big banks to crypto lending. This could boost liquidity and lower rates for borrowers.

DeFi Under the Microscope: What Changes Are Coming?

DeFi lets users trade and lend without banks. It’s grown fast, with billions locked in protocols. But hacks and rugs pulls are common.

Amendments propose:

1. Defining “decentralized” clearly. No more fake DEXs run by one team.
2. Rules for DeFi governance tokens. Are they securities?
3. Licensing for DeFi apps that touch fiat money.

Pro-crypto senators like Cynthia Lummis back light-touch rules. Others, like Elizabeth Warren, want tougher oversight.

Other Notable Amendments Shaping the Bill

These tweaks could make the bill stronger and more practical.

What Happens Next for the Crypto Bill?

The Senate will debate these amendments soon. Not all will pass. Leaders like Chuck Schumer decide what goes to a vote. Expect horse-trading.

If FIT21 passes with changes, it heads to President Biden. He might sign it, given his pro-innovation stance lately.

Timeline: Watch for votes in late summer or fall 2024. Delays could push it to 2025.

Implications for Investors and Builders

For investors: Clearer rules mean less fear of SEC crackdowns. Prices might rise on good news.

For builders: DeFi and yield rules will shape what apps can do. Compliant projects win big.

Global angle: US rules set the tone worldwide. Other countries watch closely.

Why This Matters for the Future of Crypto

isn’t just news. It’s a sign crypto is maturing. From wild west to regulated market. This bill could unlock trillions in value.

Stay tuned. The crypto bill battle will define Web3 for years.

FAQ: Crypto Bill Amendments Explained

Q: Will these amendments kill DeFi?
A: No. Smart rules protect users without stopping innovation.

Q: What about Bitcoin and Ethereum?
A: They stay as commodities under CFTC. Safe from big changes.

Q: How to follow updates?
A: Track Senate hearings and crypto news sites.

Got questions? Drop them in comments below!