The Digital Asset Market Clarity Act has encountered significant resistance in the U.S. Senate, making its passage this year unlikely. Miles Jennings, head of policy at a16z crypto, said Thursday that banks fighting the CLARITY Act are "accelerating their own obsolescence." He argued that blocking the bill leaves in place the stablecoin yield arrangements banks have actively opposed.
The CLARITY Act's core aim is to define digital assets as either securities or commodities, assigning clear regulatory jurisdiction to the Securities and Exchange Commission or the Commodity Futures Trading Commission. The legislation also sought to grant the CFTC explicit authority over commodity trading, which includes a significant portion of crypto assets like Bitcoin and Ethereum.
Without new legislation, a gap in U.S. oversight authority persists. The CFTC lacks explicit power over much of the crypto spot market, leaving existing agencies to address a complex regulatory landscape using their current mandates.
In response, the SEC and CFTC have continued to issue position statements and guidance covering mining, memecoins and rewards, including a taxonomy defining how regulators categorize and supervise different digital assets.
The SEC is also advancing its own policy efforts. The agency is expected to propose a limited sandbox for tokenized securities in the coming weeks, an initiative that has taken longer than initially indicated. The SEC also plans to propose a new crypto rule designed to ease compliance burdens for developers and offer clearer fundraising guidelines for emerging projects.
SEC Chairman Paul Atkins has consistently emphasized the need for Congressional action to produce durable policy. In a March speech, Atkins said only Congress can ensure "regulation in this area is future-proofed through comprehensive market structure legislation."
Banking regulators have accelerated granting charters to crypto firms, and the Federal Reserve is developing tailored access to its payment rails and other services, moves aimed at reducing reliance on traditional banking intermediaries.
The industry secured a legislative win with passage of the Guiding and Establishing National Innovation for U.S. Stablecoins Act, or GENIUS Act, in 2025, which established a federal framework for U.S. stablecoin issuers and formally integrated crypto into the regulated financial system.
The stalled CLARITY Act leaves asset classification ambiguous on-chain, creating friction for tokenized securities development in DeFi and for institutional capital seeking regulatory certainty.
Jennings' argument cuts to the core paradox for traditional finance: by blocking a comprehensive market structure bill, banks prolong a regulatory environment where on-chain stablecoin yields operate without the constraints CLARITY might have imposed, potentially directing more capital toward DeFi protocols offering those yields.
