Market Structure Negotiations Continue as Senate Delays Markup, OCC Issues Notice of Proposed Rulemaking and NYSE Announces Development of 24/7 Tokenized Platform

The Senate Banking Committee delayed its scheduled markup of the digital asset market structure legislation as bipartisan negotiations continue. A key point of contention is a provision prohibiting digital asset service providers from paying interest or yield in connection with the holding of a payment stablecoin, while permitting certain activity-based rewards or incentives. This approach differs from the GENIUS Act, which focuses on restricting yield paid by stablecoin issuers, whereas the market structure proposal centers on whether digital asset service providers may offer yield.

Federal regulators also took several actions during the week. The OCC issued a Notice of Proposed Rulemaking circulated under OCC Bulletin 2026-1 to clarify that national trust banks can be chartered to engage in activities limited to the operations of a trust company and related activities or to any other activities within the business of banking. The SEC announced the appointment of J. Russell McGranahan as General Counsel. The CFTC launched the Innovation Advisor Committee, formerly the Technology Advisory Committee, to advise the agency on the implications of technological innovation across financial services, derivatives and commodity markets.

In addition, the NYSE announced its development of a platform for the trading and on-chain settlement of tokenized securities, for which it will seek regulatory approvals. NYSE’s new digital platform will enable tokenized trading experiences, including 24/7 operations, instant settlement, orders sized in dollar amounts and stablecoin-based funding.

Congressional Updates

Markup Postponed on Market Structure Legislation

• On Jan. 14, Senate Banking Committee Chairman Tim Scott (R-SC) announced that the Committee would postpone its markup of digital asset market structure legislation, originally scheduled for Jan. 15, as bipartisan negotiations continue. According to press reports, on Jan. 16, Senate Democrats spoke with industry representatives. The Democrats emphasized their commitment to continuing to work with Republicans on the legislation.
• The new text of the market structure legislation was released on Jan. 12:
  • Stablecoin Yield. The new text included a draft compromise on the stablecoin yield provisions, banning digital asset service providers from paying interest or yield “solely in connection with the holding of a payment stablecoin.” Section 404(b)(1) at p. 190. This provision “shall not apply with respect to an activity-based reward or incentive.” Section 404(b)(2) at p. 190. The compromise language is based off of a proposal from Sen. Angela Alsobrooks (D-MD), where crypto exchanges would be allowed to pay rewards on stablecoin transactions, but not balances. This approach differs from the GENIUS Act, which focuses on restricting yield paid by “stablecoin issuers,” whereas the market structure proposal centers on whether digital asset service providers may offer yield.
  • Tokenized Equity. The draft includes restrictions requiring that a tokenized equity instrument confer substantially equivalent economic and legal rights as the underlying security. Section 505(d)(2) at p. 223. The text also contains restrictions regarding the SEC’s exemptive authority.
• Senate Agriculture Committee Chair John Boozman (R-AR) announced a timeline for its portion of the legislation. The Committee plans to release new draft legislation by Jan. 21 and will hold a markup on Jan. 27 at 3:00 p.m.

House Financial Services Committee Holds Fintech Hearing

• On Jan. 13, the House Financial Services Subcommittee on Digital Assets, Financial Technology and Artificial Intelligence held a hearing titled “Delivering for American Consumers: A Review of FinTech Innovations and Regulations Hearing.” Chaired by Bryan Steil (R-WI), the hearing focused on “fit for purpose” rules for fintech companies, including the current landscape of fintech-bank partnerships. HFSC Chairman French Hill (R-AR) stated that the Committee should encourage federal regulators to foster fintech bank partnerships, increase innovation and reduce regulatory burdens.

Regulatory Agency Updates

OCC Issues Notice of Proposed Rulemaking for National Trust Bank Activities

• On Jan. 8, the OCC issued a Notice of Proposed Rulemaking (NPRM) circulated under OCC Bulletin 2026-1 to clarify that national trust banks can be chartered to engage in activities limited to the operations of a trust company and activities related thereto or to any other activities within the business of banking. The NPRM is intended to clarify that a national trust bank can also engage in nonfiduciary activities, including custody and safekeeping, which the OCC notes are part of the business of banking under 12 U.S.C. 24 (Seventh). To implement such clarification, the OCC proposes to replace the term “fiduciary activities” in the OCC’s chartering regulations with the phrase “operations of a trust company and activities related thereto” to reflect that national trust banks can engage in certain nonfiduciary activities as permitted by the language across various provisions of the National Bank Act. The OCC asserts the proposed revisions “neither expand nor contract the OCC’s authority to charter a national bank.” Comments on the NPRM can be submitted on or before Feb. 11.

SEC Announces New General Counsel

• On Jan. 15, the SEC named J. Russell McGranahan as General Counsel. McGranahan most recently served as General Counsel of the U.S. General Services Administration and has prior legal industry experience.

CFTC Chairman Announces Innovation Advisor Committee

• On Jan. 12, CFTC Chairman Michael Selig announced the launch of the Innovation Advisor Committee (IAC), formerly the agency’s Technology Advisory Committee. The IAC will include both industry representatives and members of regulatory bodies. Chairman Selig said he will sponsor the committee and nominate current members of the CEO Innovation Council to join as well. The committee will be responsible for providing advice and recommendations to the agency on the “impact and implications of technological innovation in the financial services, derivatives, and commodity markets.” Nominations to join the IAC must be received by Jan. 31.

Industry Updates

New York Stock Exchange Develops Tokenized Securities Platform

• On Jan. 19, the New York Stock Exchange (NYSE) announced its development of a platform for the trading and on-chain settlement of tokenized securities, for which it will seek regulatory approvals. NYSE’s new digital platform will enable tokenized trading experiences, including 24/7 operations, instant settlement, order sizes in dollars and stablecoin-based funding.
• Subject to regulatory approvals, the platform will power a new NYSE venue that supports trading of tokenized shares fungible with traditionally issued securities, as well as tokens natively issued as digital securities. Tokenized shareholders will participate in traditional shareholder dividends and governance rights.