The Digital Asset Market Clarity Act faces significant hurdles in the U.S. Senate, making passage unlikely this year. The impasse preserves existing stablecoin yield arrangements that traditional finance institutions have actively opposed.
Miles Jennings, head of policy and general counsel for a16z Crypto, said publicly that banks fighting the CLARITY Act are "accelerating their own obsolescence." He argued that blocking the bill leaves in place the stablecoin yield structures banks lobbied hardest to stop.
The CLARITY Act aims to define which digital assets are securities versus commodities, assigning regulatory jurisdiction to the SEC or CFTC. Its failure creates a gap in U.S. oversight authority for digital asset markets, particularly for commodity trading where most crypto volume occurs.
The SEC and CFTC have sought to address some regulatory gaps through existing authorities and position statements. SEC Chairman Paul Atkins has consistently said Congress remains the only source for permanent, durable policy, reiterating that position during a March speech.
The SEC is advancing a policy effort to establish a route for tokenized securities, conceived as a limited sandbox intended to change the methods and speed of securities transfers within the United States.
The SEC also plans to propose its crypto regulation rule, expected to ease the path for crypto developers by allowing more flexible fundraising and relaxed oversight for emerging projects.
Jennings said the CLARITY Act had advanced through the Senate Banking Committee, marking a bipartisan step. The bill builds on the GENIUS Act, signed in July 2025, which established a federal framework for payment stablecoin issuers, reserves and audits.
While the GENIUS Act addressed payment stablecoins, the CLARITY Act sought to tackle broader market structure issues, including DeFi treatment, ethics language, taxes and real-world asset tokenization.
Jennings said regulatory clarity tends to unlock institutional capital and characterized the CLARITY Act as a "starting gun" for bringing traditional finance infrastructure on-chain, rather than a finish line.
The continued absence of market-structure legislation affects on-chain capital flows. DeFi lending protocols offering stablecoin yields will keep operating without the explicit federal definitions CLARITY sought to provide.
On-chain real-world asset tokenization—particularly for Treasuries and credit products—continues to draw stablecoin liquidity. The SEC's tokenized securities sandbox could further integrate traditional financial assets into the on-chain ecosystem regardless of the CLARITY Act's legislative status.
