CoinDesk
The Senate failed to advance the 635-page Digital Asset Market Clarity Act, leaving a proposed US rulebook for crypto markets unresolved. With midterm elections approaching, Cato Institute research fellow Ryan Chan-Wei argues there is no realistic path to revive the bill before year-end. He expects much of the legislative effort to reset when the next Congress takes office.
Why it matters
The Clarity Act aimed to define legal categories for crypto tokens, set licensing rules for firms that trade them and divide oversight between the Securities and Exchange Commission and the Commodity Futures Trading Commission. Chan-Wei argues that without those rules, regulated institutions remain reluctant to commit capital and consumers lack a clear supervisory framework.
The bill had attracted support from both the crypto industry and firms including Goldman Sachs and BlackRock. Chan-Wei writes that core market-structure questions had largely been settled, but concerns over conflicts of interest at the highest levels of government held up the legislation. He argues those ethics concerns could have been addressed through other legislation.
Market impact
The setback extends regulatory uncertainty rather than establishing a new market rule. For firms weighing US crypto investment, the unresolved questions remain which assets fall under which rules, what licenses trading venues need and which agency supervises them.
The next Congress also faces a change in personnel. Sen. Cynthia Lummis, chair of the Senate Banking Subcommittee on Digital Assets, and Sen. Thom Tillis, who helped broker a compromise on stablecoin rewards, are retiring. Chan-Wei warns their departures could make it harder to carry the bill's progress into the next legislative session.
Frequently asked questions
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What rules would the Clarity Act have established?
It aimed to classify crypto tokens, set licensing rules for trading firms and divide supervisory authority between the SEC and CFTC.
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Why does Ryan Chan-Wei expect the legislative effort to reset?
He sees no realistic path to revive the bill before year-end and warns that the next Congress will lose two key figures in the effort, retiring senators Cynthia Lummis and Thom Tillis.
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What held up the bill despite agreement on market structure?
Chan-Wei writes that concerns about conflicts of interest at the highest levels of government held it up, even though core market-structure questions had largely been settled.
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Which major financial firms supported the Clarity Act?
Goldman Sachs and BlackRock were among the Wall Street firms that supported it, alongside the crypto industry.
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What remains uncertain for firms considering US crypto investment?
The bill's failure leaves unresolved how crypto assets would be classified, what licenses trading venues would need and which agency would supervise them.
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