Lawmakers return to Washington this week after the August recess, but the outlook for the CLARITY Act remains uncertain ahead of a key Senate vote.
Senate Majority Leader John Thune scheduled a critical procedural vote on the cryptocurrency bill for September 15. If the legislation clears that hurdle, it could advance to a full Senate floor vote.
However, major sticking points remain unresolved. Issues including ethics provisions and stablecoin yield have become deal-breakers for some Democrats and a handful of Republicans.
With the November midterm elections approaching, market confidence in the bill’s progress this month has weakened. At the time of writing, prediction market Polymarket priced the chances of passage at just 14%.
Source: Polymarket
SEC and CFTC prepare alternatives as CLARITY Act stalls
The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have begun pursuing alternative measures in case the CLARITY Act fails to advance.
In August, the SEC proposed $75M in crypto funding through an initial coin offering (ICO). The agency also submitted a draft proposal to the White House that would update custody rules and expand them to cover crypto services and assets.
On September 1, the SEC announced another significant policy shift by proposing updates to transfer-agent rules. The proposal includes blockchain technology and could establish a formal pathway for tokenized stocks and other assets.
The SEC added:
As technology changes & the competitive marketplace evolves, good government requires revisiting legacy rules & regulations.
Reacting to the SEC’s update, ETF expert Nate Geraci welcomed the move, writing:
Once again…SEC not waiting around for Clarity Act to move forward w/ crypto rulemaking. They’re basically calling Congress’s bluff.
The CFTC has taken similar steps. The derivatives-market regulator is reportedly exploring ways to bring perpetual markets onshore, including the popular trading platform Hyperliquid.
Kristin Smith, president of the Solana Policy Institute, also expressed a view aligned with Geraci and played down concerns in the crypto sector caused by uncertainty surrounding the CLARITY Act.
Pretty much nobody is debating whether crypto ends up inside the existing financial system (or replaces it). They’re all working on how it exists or replaces it.
The pace of crypto-market rulemaking by the SEC and CFTC could increase after mid-September if the CLARITY Act fails to reach a Senate floor vote. However, it remains unclear whether regulatory action from the two agencies will be enough to unlock institutional capital that has been waiting for clearly codified rules.
CLARITY Act passage remains uncertain
The CLARITY Act faces an uncertain Senate path, with Polymarket pricing only a 14% chance of passage. As Congress delays action, analysts have welcomed recent SEC and CFTC initiatives aimed at establishing clearer rules for the crypto industry.
