CLARITY Act Delay Is Now A Compliance Problem, Not Just A Political One
A year after Washington's "Crypto Week," two key digital asset bills are law: the GENIUS Act for stablecoins and a measure blocking a Fed CBDC. However, the crucial CLARITY Act, intended to define SEC or CFTC jurisdiction over the entire digital asset market, remains stalled in the Senate. This legislative gridlock leaves businesses in regulatory limbo, unable to build stable compliance programs as jurisdictional lines remain uncertain. The bill faces a tight Senate calendar and significant hurdles, including disputes over ethics for officials' crypto holdings, law enforcement concerns, stablecoin yield provisions, and understaffed regulatory agencies. Failure to pass CLARITY means continued regulation by enforcement, hindering innovation and leaving the U.S. behind global competitors with clearer frameworks.
One year ago this week, Washington declared Crypto Week. The U.S. House of Representatives passed three landmark digital asset bills in rapid succession: the CLARITY Act, establishing whether digital assets fall under SEC or CFTC jurisdiction, the GENIUS Act, creating the first federal framework for payment stablecoins, and the Anti-CBDC Surveillance State Act, which cleared the chamber by a narrow 219 to 217 vote. CLARITY passed 294 to 134 on July 17, 2025, and GENIUS was signed into law the next day.
One year later, two of those promises are law.
GENIUS reaches its first major rulemaking deadline on July 18. The anti-CBDC campaign stalled when a promise to attach it to the defense bill went unkept, then crossed the finish line by an unlikely route. A provision barring the Federal Reserve from issuing a central bank digital currency through 2030 rode inside the 21st Century ROAD to Housing Act. The president refused to sign it over an unrelated voting dispute involving the SAVE AMERICA Act. The bill, however, held a veto-proof majority and, accordingly, the ROAD Act became law automatically on July 10. The margins, 358 to 32 in the House and 85 to 5 in the Senate, made his signature unnecessary.
The third promise, and arguably the most consequential, remains stuck in the Senate. That delay is increasingly covered as another episode of congressional gridlock. It should not be. For boards, general counsel, chief compliance officers and risk committees, the Clarity Act stopped being just a political story some time ago. Now, it is also a governance, risk and compliance deadline, as well.
GENIUS presented the easier legislative path because it governs a single product within the digital asset economy: the payment stablecoin. The Clarity bill, however, regulates the entire market. Stablecoins are one category of digital asset; market structure determines how every exchange, broker, custodian, issuer and institutional participant operates. The bill answers the question that determines everything else: whether a given digital asset falls under the jurisdiction of the SEC (securities) or the CFTC (commodities). Registration, custody, listing decisions and disclosure posture all flow downstream from that single classification.
Absent Clarity’s enactment, the classification question is resolved two ways: by whichever agency sues first, and by whoever holds the White House. Both answers stoke the same fires of regulatory uncertainty that plagued the industry and confounded compliance professionals in previous years. No firm can build a durable compliance program on a jurisdictional line that shifts with each administration, and no board can price regulatory risk when the identity of the governing regulator is itself uncertain. That uncertainty becomes an enterprise governance issue long before it becomes a trading issue.
For most large companies, digital assets are no longer confined to treasury experiments or innovation teams. Vendor relationships, payment infrastructure, tokenized assets, custody arrangements and counterparty exposure increasingly intersect with enterprise risk management, whether or not the institution ever touches a token.
The industry's biggest regulatory question is no longer whether Washington will regulate digital assets. It is whether Congress, not regulators, will decide who regulates them. Despite the president’s considerable influence on the direction of executive policy,
The bill has languished on the Senate Legislative Calendar since June 1, eligible for floor consideration, but with no vote scheduled. Majority Leader John Thune (__-__) has prioritized the National Defense Authorization Act for the week of July 13, pushing the Clarity bill vote toward the weeks of July 20 or July 27, the two windows under active discussion before the August recess. The House is in session only through July 23, and once Congress returns in September, roughly three weeks of session remain before lawmakers disperse into full campaign mode ahead of the midterms.
Senator Lindsey Graham (R-S.C.) died July 11 at 71, and Senator Mitch McConnell (R-Ky.) has missed votes during an ongoing medical issue, narrowing an already thin Republican majority. The Republican side is far from unified, either. Senators Josh Hawley (R-Mo.) and Rand Paul (R-Ky.) were the only Republicans to vote against the GENIUS Act. Paul opposes federal regulation of the industry generally; Hawley objected to the absence of limits on Big Tech ownership of stablecoins. Analysts including Galaxy Digital's Alex Thorn expect both to oppose CLARITY as well. By that calculation, leadership needs as many as nine Democratic crossovers to reach 60 votes.
The Senate Banking Committee advanced the bill 15 to 9 on May 14, with Senators Ruben Gallego (D-Ariz.) and Angela Alsobrooks (D-Md.) joining all Republicans. Both have said their committee votes were conditional, not floor commitments.
Four disputes stand between the bill and the votes it needs. The first is ethics. Senator Elizabeth Warren (D-Mass.) wrote to Thune and Senate Minority Leader Chuck Schumer (D-N.Y.) on July 13, pressing for guardrails preventing senior officials and members of Congress from profiting off the crypto industry. Her letter cited the president's 2025 financial disclosure, which revealed approximately $1.4 billion in crypto-related income.
The merged draft combining the Banking and Agriculture committee texts omits the ethics provision entirely, and Senator Kirsten Gillibrand (D-N.Y.) has said enforceable language covering officials' crypto holdings is a prerequisite for Democratic support. One compromise under discussion, described by Senator Cynthia Lummis (R-Wyo.), would allow state attorneys general to sue exchanges that list tokens issued by public officials in violation of the act. Even so, Senate Republicans are unlikely to advance ethics language the White House rejects.
The second is law enforcement. The National District Attorneys Association argued to Senate leadership that Section 604 would materially impair criminal investigations involving cryptocurrency. That section, known as the Blockchain Regulatory Certainty Act, shields non-custodial software developers from money transmitter obligations. Senator Ron Wyden (D-Ore.) countered in a July 8 letter that developers who never control customer funds should not be treated as money transmitters simply for publishing software. Senators Mark Warner (D-Va.) and Catherine Cortez Masto (D-Nev.) have tied their support to law enforcement's sign-off.
The third is stablecoin yield. Banking trade groups argue the bill's language creates a loophole allowing digital asset platforms to offer interest-equivalent rewards outside the GENIUS Act's prohibition on issuer-paid interest. Not every stakeholder is urging speed, either: the Independent Community Bankers of America has questioned why the bill is moving so quickly at all.
The fourth dispute has been building since January: regulator staffing. The CFTC, which would gain jurisdiction over digital commodity spot markets under the bill, has operated with a single commissioner since December, and the SEC carries two vacancies of its own. Senator Amy Klobuchar (D-Minn.), the Agriculture Committee's ranking Democrat, proposed an amendment that would prevent the framework from taking effect until at least four CFTC commissioners are confirmed, and some committee Democrats have made staffing a condition of their floor votes.
The concern crosses party lines. House Agriculture leaders from both parties wrote the president in May urging a full commission, arguing that complete agencies write more durable rules. It is a concern compliance officers should recognize: sweeping rules issued by a single commissioner invite immediate legal challenge, recreating the uncertainty the bill exists to end.
If the bill dies in this window, the consequences run well past the recess. Lummis has warned that failure now could defer market structure legislation until 2030. In the interim, regulation by enforcement remains the default policymaking mode, legal spend becomes a structural line item rather than a project cost, product and partnership timelines stretch under classification uncertainty, and boards make capital allocation decisions on regulatory guesses.
Other jurisdictions are not waiting. South Africa is hardly the world's largest capital market, yet its Financial Sector Conduct Authority has already approved 300 crypto asset service provider licenses out of 512 applications under a defined statutory framework, while the United States still lacks a permanent answer to the foundational question of regulatory jurisdiction.
The mirror image is equally concrete. Defined registration pathways and a statutory digital commodity category reward institutions that mapped their exposure in advance, and a classification codified by Congress, unlike an agency determination, cannot be reversed by the next administration.
The prudent posture is identical under either outcome. Compliance leaders should inventory every digital asset touchpoint and the classification assumption behind it, document the reasoning so the file demonstrates diligence under either regulator, commission the two-scenario board memo now rather than after the vote, and pressure test custody and counterparty arrangements against both frameworks.
One year ago, Washington promised clarity. Two of Crypto Week's three promises are now law. The last, and the most consequential one that will determine how the entire market is regulated, remains unfinished. The House returns to it with a hearing on the anniversary itself.
Whether the Senate delivers that final piece is beyond any organization's control. Whether boards, compliance leaders and general counsel are prepared for either outcome is not.