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Lawmakers are going back to Washington this week after the August recess. But the CLARITY Act’s passage outlook remains uncertain ahead of the Senate vote.
Last month, Senate Majority Leader John Thune scheduled a critical procedural vote on the crypto bill for the 15th of September. If it clears this hurdle, the bill could proceed to a full floor vote.
Unfortunately, there are sticking points, including ethics and stablecoin yield, that have remained unresolved and are deal-breakers for some Democrats and a handful of Republicans.
With November midterms closing in, the market has become doubtful of the bill’s progress this month. As of this writing, prediction site Polymarket was pricing only a 14% chance of passage.
SEC and CFTC race for plan B as CLARITY Act stalls
The regulators, the SEC and CFTC, have activated their countermeasures in case the bill falters.
In August, the SEC proposed $75M crypto funding via ICO (initial coin offering). Notably, the agency also submitted a draft to the White House to update custody rules and expand them to crypto services and assets.
On the 1st of September, the SEC made another historical guideline and shift: an update on transfer agent rules. The proposal includes blockchain and paves the way for a formal path for tokenized stocks and broader assets. The SEC added,
As technology changes & the competitive marketplace evolves, good government requires revisiting legacy rules & regulations.
Reacting to the SEC update, ETF expert Nate Geraci hailed the move, noting that,
Once again…SEC not waiting around for Clarity Act to move forward w/ crypto rulemaking. They’re basically calling Congress’s bluff.
Similarly, the CFTC has followed the SEC’s steps. The derivatives market regulator is reportedly exploring ways to onshore perpetual markets, including the popular platform Hyperliquid.
For her part, Solana Policy Institute President Kristin Smith also shared Geraci’s stance and downplayed the skepticism in the sector due to uncertainty around 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.
There is a likely chance that the pace of crypto market guidelines from the two regulators will increase after mid-September if the CLARITY Act floor vote fails. But whether this will be enough to unlock institutional capital that has been waiting for codified rules remains unclear.
Final Summary
- Senate floor vote passage for the CLARITY Act remains uncertain, with only a 14% chance.
- Analysts have hailed the SEC and CFTC guidelines for the sector as Congress stalls the bill.