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Rep. French Hill (R-Ark.), widely regarded by industry observers as a principal architect of recent congressional crypto legislation, is urging refinements to the GENIUS market-structure proposal as lawmakers and regulators scramble to craft rules for digital-asset markets. Framing the initiative as fundamentally sound but in need of targeted adjustments, Hill said tweaks to GENIUS are necessary to reconcile investor protections with market efficiency and innovation – a stance that amplifies the stakes for exchanges, custodians and policymakers weighing the next phase of crypto oversight.
Hill’s intervention arrives as stakeholders from Capitol Hill to the trading floors press for clearer architecture around market access, custody standards and surveillance mechanisms. His call for modifications is highly likely to shape debate among committee members, regulators and market participants as they attempt to translate broad policy goals into implementable regulatory design.
Father of Crypto Bills Rep.French Hill Urges Market-Structure Effort to Tweak GENIUS Framework
Rep. French Hill has urged lawmakers and regulators engaged in the current market‑structure review to adopt targeted adjustments to the GENIUS framework to better reflect evolving trading practices and custody arrangements in the crypto sector. In recent remarks, he stressed that amendments should aim to reduce regulatory fragmentation while preserving investor protections, arguing that a narrowly tailored approach can accelerate market maturity without sacrificing oversight.
Among the priorities he outlined were specific, actionable changes that would clarify roles and obligations across the ecosystem. Key items he highlighted included:
- Clarifying intermediary roles: distinct definitions for broker‑dealers, exchanges, and custodians to prevent regulatory overlap.
- Custody and safeguarding: updated standards that reconcile customary custody rules with native‑asset mechanics.
- Registration and compliance pathways: streamlined processes to reduce barriers for compliant market participants.
Regulatory officials and industry groups have signaled openness to constructive revisions, though stakeholders diverge on the scope and pace of changes. Hill urged a deliberative timeline that balances technical rulemaking with legislative oversight, arguing that bipartisan coordination and technical working groups will be necessary to translate conceptual fixes into durable policy outcomes.
Lawmakers and Regulators Encouraged to Balance Investor Protection with Market Innovation
Policymakers must craft rules that mitigate clear harms-such as fraud, custody failures and market manipulation-without stifling the technological advances driving the digital-asset sector. Observers and industry participants alike argue for proportionate, technology-neutral regulation that targets misconduct while allowing legitimate innovation to progress. Senate and agency deliberations should be informed by market data and incident analyses so that measures address real vulnerabilities rather than hypothetical worst‑case scenarios.
Practical regulatory tools should combine mandatory protections with space for experimentation. Recommended measures include:
- Clear custody and custody‑provider standards to protect retail assets and reduce counterparty risk;
- Obvious disclosures and reporting requirements that improve market integrity and investor decision‑making;
- Regulatory sandboxes and time‑limited waivers to permit safe testing of novel services under supervisory oversight.
regulators can also draw lessons from established digital‑service practices-such as robust account authentication, device‑recovery mechanisms and user data controls-to enhance platform security and consumer recourse.Requiring platforms to implement evidence‑based operational safeguards, maintain incident‑response plans and cooperate across borders will help reconcile investor protection with continued market dynamism. Oversight frameworks should be subject to periodic review so that rules evolve with technology and market structure.
Hill Details Proposed Amendments Focused on Liquidity, Transparency and Oversight
The bill outlines a series of targeted measures intended to shore up market resilience by tightening capital and liquidity protocols for digital-asset firms. lawmakers propose mandating minimum liquidity reserves, routine stress testing under regulator-defined scenarios, and explicit limits on the concentration of assets that can be used to meet short-term obligations. Sponsors argue these steps are designed to reduce systemic spillovers and to create clearer expectations for firms that provide critical market-making and custody functions.
Transparency reforms form a central pillar of the package, with drafters calling for standardized disclosures and self-reliant verification of reported metrics.Key elements include:
- Standardized, periodic reporting of liquidity positions and counterparty exposures;
- Independent third-party audits of custody arrangements and reserve holdings;
- Real-time or near-real-time reporting obligations for systemic actors to designated regulators.
To strengthen oversight, the proposal expands supervisory authority and enforcement tools, emphasizing coordinated supervision across agencies and clear escalation paths for noncompliance. the amendments would grant regulators enhanced inspection rights, introduce calibrated penalty frameworks for breaches, and establish whistleblower protections to encourage early reporting of misconduct. Together, these provisions aim to increase market discipline while providing authorities the resources to act quickly in periods of stress.
As lawmakers and market participants digest french Hill’s call to adjust the GENIUS framework, the debate over how best to reconcile traditional market structure principles with the idiosyncrasies of digital-asset trading is likely to intensify. Hill’s intervention-coming from a legislator long associated with crypto policy-raises the prospect of targeted legislative language and heightened oversight aimed at enhancing transparency, liquidity and investor protections without stifling innovation.
The next phase will hinge on committee deliberations, stakeholder testimony and interagency coordination to translate broad objectives into enforceable rules. Market participants, from exchanges to custodians and trading firms, will be watching closely for draft amendments that could recalibrate trading, reporting and settlement mechanics across the industry.
Ultimately, any tweak to GENIUS will be judged by its ability to foster orderly, resilient markets that protect investors while accommodating the technological evolution of digital assets. As Congress weighs competing priorities, the outcome of this market-structure effort could set a defining precedent for the regulatory architecture of crypto in the years ahead.
the Bitcoin Street Journal will continue to monitor developments and provide analysis as lawmakers, regulators and industry stakeholders respond to this evolving policy debate.
