Congress continues to move full-steam ahead on cryptocurrency legislation as the Senate Banking Committee on Tuesday released a digital asset market structure discussion draft.
The news comes after President Donald Trump last week signed the GENIUS stablecoin Act and the House of Representatives passed key cryptocurrency bills. Despite the positive development, shares of Circle Internet tumbled after the stablecoin issuer received an analyst downgrade on Monday.
The Senate Committee on Banking, Housing and Urban Affairs on Tuesday released a discussion draft building on the CLARITY Act, which passed the House last week. Chairman Tim Scott (R-S.C.), Subcommittee on Digital Assets Chair Cynthia Lummis (R-Wyo.), Senator Bill Hagerty (R-Tenn.) and Senator Bernie Moreno (R-Ohio) spearheaded the release.
The draft discussion includes additional steps. Among them are defining ancillary assets to which digital assets are not securities and creating disclosure requirements for ancillary assets. It also creates new rules for the Securities and Exchange Commission, such as exempting certain ancillary assets from SEC registration. It also defines an investment contract, and tailors existing SEC requirements to cover digital asset activity. The draft discussion allows bank holding companies to utilize distributed ledgers. It also requires new examination standards to prevent illicit activity, according to the report.
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In addition to the draft discussion, Chairman Tim Scott and the Senate Banking Committee are calling for input from cryptocurrency stakeholders. The Committee wants feedback on questions surrounding regulatory clarity and tailoring, investor protection, trading venues and market infrastructure. Also on custody, illicit finance, banking, innovation and preemption, according to the news release.
"The draft legislation released by the Senate Banking Committee today represents a necessary step forward in writing clear rules of the road for crypto," said Nathan McCauley. McCauley is CEO and cofounder of Anchorage Digital, a federally chartered crypto bank. "Knowing the who, how, and why behind crypto regulation is essential for protecting consumers and giving the industry the certainty we need to build in the U.S. for the long term."
Circle Downgraded
Elsewhere, Compass Point yesterday downgraded Circle Internet to sell from neutral, The Fly reported. The firm believes that Circle's USDC stablecoin can still be an integral part of the financial system after the GENIUS Act passed last week. But Compass Point is a bit more cautious about Circle's long-term economics, despite the $53 billion valuation. Compass Point expects Circle in the coming weeks to expand its distribution network while sharing a greater percent of its interest income. It lowered its price target on CRCL stock to 130 from 205.
CRCL stock carved 8.2% lower on Tuesday, adding to its 3.4% decline from Monday. Shares fell 4.8% on Friday after hitting a July high of 262.97 during daily trade.
Circle launched its IPO in June at 31 per share. The stock soared to a high of 289.99 on June 26 but quickly retreated below 200.
Coinbase shares also slid 2.2%. COIN stock has soared almost 63% in 2025 and hit a record high of 444.65 on Friday.
Bitcoin Price, Crypto Stock Action
Bitcoin traded around $119,700 Tuesday, up 2.5% over the past day. The world's largest cryptocurrency on July 14 powered to a record near $123,100 to handily clear its previous peak of $111,970 from late May. Bitcoin has surged more than 27% in 2025.
Ethereum continues to rally, hitting a 2025 high of $3,798 on Tuesday. ETH eased to $3,690 in the afternoon. Ethereum has soared 50% over the past month and is now up about 10% on the year.
Bitcoin miners climbed after mixed performance in early trade.
Bitfarms rallied 16.8%, while Hive Digital jumped 10%. MARA Holdings and and TeraWulf surged more than 5%. CleanSpark advanced 3.6%. Iren both climbed more than 2%. Riot Platforms rose 1.8%.
The iShares Bitcoin Trust ETF and other spot bitcoin ETFs gained 2.3% on Tuesday. Shares of the group are trading above buy zones, after flat base breakouts earlier this month.
You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison
