U.S. crypto policy shifts to regulators as Clarity Act prospects fade

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U.S. crypto policy shifts

Highlights

The Digital Asset Market Clarity Act failed to secure a Senate vote this week, reducing the likelihood of a new U.S. crypto market-structure law passing in 2024.
In the absence of congressional action, the SEC and CFTC continue issuing guidance on crypto activities, but lack explicit new statutory authority over crypto spot markets.
Passage of the GENIUS Act provides a legal framework for stablecoin issuers, but uncertainty from the Clarity Act's failure could deter capital and risk further crypto market declines.

Regulatory fallback gains importance

As reported by CoinDesk, the Digital Asset Market Clarity Act fails to secure a procedural Senate vote this week, weakening the chances that Congress passes a bespoke U.S. crypto market-structure law this year.

If the bill stalls for good, the immediate consequence is that Congress does not clearly define which digital assets are securities, commodities or other instruments, and it does not explicitly assign broader authority to the U.S. Commodity Futures Trading Commission over much of the spot trading where crypto changes hands. That leaves a significant gap in U.S. oversight, even as the CFTC and the Securities and Exchange Commission continue trying to address parts of it through existing powers.

That regulatory route is emerging as the likeliest near-term outcome. The SEC and CFTC are already issuing guidance and position statements that clarify how crypto activity such as mining, memecoins, rewards and other categories can proceed without violating current rules, although SEC Chair Paul Atkins repeatedly says only Congress can provide permanent and durable policy authority.

Market impact and Washington outlook

Banking regulators are also moving in parallel, rapidly granting charters to crypto firms, while the Federal Reserve is working on tailored access to payment rails and other services that could reduce the industry's reliance on traditional banking intermediaries.

The sector already secures a major legislative win with the Guiding and Establishing National Innovation for U.S. Stablecoins Act, or GENIUS Act, which gives U.S. stablecoin issuers a legal framework after the industry's crisis period in 2022. That progress, combined with growing support in Congress and heavy political spending by crypto interests, suggests Washington sentiment is becoming more favorable toward the sector.

Even so, the absence of the Clarity Act could keep a meaningful share of capital and financial infrastructure on the sidelines while companies operate under uncertain legal footing. A definitive failure, whether during the Senate's limited September window or in the year-end lame-duck session, could also trigger another decline in crypto markets.

Our earlier coverage of the Senate’s planned procedural vote on the Digital Asset Market Clarity Act detailed how Banking Committee Chair Tim Scott argued the chamber still had time to take up the bill before recess. We outlined his view that growing Republican consolidation could draw Democratic engagement, and that the legislation is intended to set clearer operating standards for U.S. digital asset firms around consumer protection, innovation, and competitiveness.

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