The CLARITY Act, crypto market infrastructure legislation, is a key component of ensuring the US is a leader in the digital asset race. The bill outlines who oversees what while incorporating important consumer-protection features. Unlike the prior administration, which sought to undermine digital asset development while regulating by enforcement, the current administration sees value in letting markets drive the digital future of finance.
While the CLARITY Act was approved in the House last year, it took months for the legislation to be voted out of the Senate Banking Committee, and it now needs a floor vote in the Senate to reach the White House for signature. Some observers worry that if the bill does not accomplish these steps before the summer recess, the legislation could get lost in the midterm race to control Congress.
While worries persist, other insiders anticipate the bill will move forward before the August deadline. Recently, Senator Cynthia Lummis, a digital asset supporter and member of the Senate Banking Committee, shared that the legislation, along with any tweaks, will be released over the July 4th holiday to gather industry feedback. If all is good, the bill will move to a floor vote. Speaking on Fox Business, the Senator stated:
“We are finally to the point where we are going to put out the text over the July 4th and give people one last, really thorough look at the bill. And then, we are moving in July.”
This queues up a vote before August.
Lummis has cautioned that “digital asset innovation doesn’t wait for regulatory clarity. It just moves somewhere else. I refuse to let that keep happening on my watch.” She describes the CLARITY Act as reclaiming ground already lost to more amenable jurisdictions, adding, “China is not confused about whether it wants to lead in digital assets. We should not be confused either.”
Kristin Smith, formerly the CEO of the Blockchain Association and now leading Solana, provided some perspective on the horse-trading taking place on Capitol Hill. She says, “There are daily in-person meetings between key negotiators at the member level. That wouldn’t be happening if no one thought this could go anywhere. In Congress, time is scarce, and Clarity has a lot of attention.”
She notes that the legislation has bipartisan support – it is not just Republicans supporting the bill, and the crypto sector has effective, sophisticated lobbying in place – vital in Washington.
“We have 4 critical weeks from July 13 to August 7 to get this through the Senate. That is enough time to put Clarity on the agenda – and move it forward.”
The Chairman of the House Financial Services Committee, Representative French Hill, is optimistic too, stating:
“We need to find a way to get this forward. I think pro-innovation Democrats need to unite with Republicans in the Senate and get this bill across the Senate floor so that we can honor our commitment that we made last year that we want the U.S. to have a clear framework for digital assets… the innovation is ongoing, and we want it to be done here in America, and we want American financial services firms leading it.”
With any updated language expected to be made available next week, interested parties should know whether crypto will secure a victory in Washington, DC. Will yield remain in some form? Will developers keep the protections needed for DeFi to survive? Or will banks use their exceptional lobbying skills and deep pockets to undermine digital asset innovation? We will know soon enough.