Key Facts
- ✓ The draft provision would treat tokens as “non-ancillary” assets.
- ✓ This classification exempts tokens from SEC securities rules.
- ✓ To qualify, tokens must have been in an ETF by 2026.
- ✓ XRP, Solana, and Dogecoin are specifically named in the proposal.
- ✓ The move would grant them the same legal status as Bitcoin.
A Regulatory Shift
The regulatory fog surrounding major cryptocurrencies may finally be lifting. A newly surfaced draft provision proposes a landmark change that would place digital assets like XRP, Solana, and Dogecoin on the same legal footing as Bitcoin.
This potential reclassification represents a significant departure from the current enforcement-heavy approach. It suggests a move toward a more structured and predictable framework for the digital asset industry, which has long sought clarity on how its products will be governed.
The Draft Provision
The core of the proposal lies in its redefinition of asset status. The draft provision would treat specified tokens as non-ancillary assets. This specific legal term is crucial, as it removes the assets from the purview of securities regulations typically enforced by the Securities and Exchange Commission (SEC).
The path to this favorable classification, however, is clearly defined. To qualify for the exemption, a token must meet one primary condition:
- Be included in an Exchange Traded Fund (ETF) by the end of 2026
This ETF requirement acts as a regulatory benchmark, suggesting that tokens achieving sufficient market maturity and institutional integration through regulated investment products will be granted a more lenient status.
"The draft provision would treat tokens as “non-ancillary” assets, exempt from SEC securities rules, if they were in an ETF by 2026."
— Draft Provision
Key Assets Identified
While the legislation could impact the broader market, it specifically names several prominent cryptocurrencies. The inclusion of XRP, Solana, and Dogecoin is particularly noteworthy given their history with regulatory scrutiny.
These assets represent a diverse segment of the crypto market:
- XRP: The native token of the XRP Ledger, often used for cross-border payments.
- Solana: A high-performance blockchain supporting builders around the world.
- Dogecoin: A meme-originated cryptocurrency that has grown into a significant digital asset.
By explicitly naming them, the draft seeks to eliminate ambiguity and provide a clear path forward for assets that have established significant market capitalization and user bases.
The ETF Benchmark 📈
The 2026 ETF deadline is more than just a date on a calendar; it is a strategic regulatory lever. By tying the non-ancillary status to the existence of an ETF, lawmakers are incentivizing the creation of regulated investment vehicles.
This approach achieves two goals simultaneously. First, it offers regulatory clarity to projects that have already achieved mainstream financial integration. Second, it encourages the rest of the industry to pursue similar institutional-grade products. The ETF becomes a gateway to a more favorable legal environment.
The draft provision would treat tokens as “non-ancillary” assets, exempt from SEC securities rules, if they were in an ETF by 2026.
This mechanism effectively outsources a degree of regulatory vetting to the established financial markets, using the ETF approval process as a filter for legitimacy.
Implications for the SEC
The proposed legislation would fundamentally alter the operational landscape for the SEC. For years, the commission has relied on the Howey Test to argue that many cryptocurrencies qualify as unregistered securities. This draft provision would carve out a significant exception to that authority.
By defining certain tokens as non-ancillary, the bill would shield them from the SEC's primary enforcement tool. This could lead to a major strategic shift for the regulator, forcing it to focus its resources elsewhere or collaborate more closely with other regulatory bodies like the Commodity Futures Trading Commission (CFTC). The era of regulatory ambiguity for these top-tier assets would effectively end.
Looking Ahead
This draft provision marks a pivotal moment for digital asset regulation in the United States. It offers a clear, albeit conditional, path for major cryptocurrencies to escape the regulatory purgatory they have been operating in. The proposal balances regulatory oversight with market innovation, using the established ETF framework as a bridge.
Key takeaways for investors and industry observers include:
- Clarity is Coming: A defined legal status for major tokens is on the horizon.
- The 2026 Deadline: The race to launch ETFs for these assets will intensify.
- SEC's Role Redefined: The commission's authority over top cryptocurrencies would be significantly curtailed.
As this draft moves through legislative channels, it will undoubtedly be the subject of intense debate. However, it stands as one of the most significant developments in the quest for a comprehensive U.S. crypto regulatory framework.
