The cryptocurrency regulatory framework long anticipated by Wall Street may reach a critical stage with Tuesday’s vote on the market structure bill in the U.S. Senate. However, even if the Digital Asset Market Clarity Act (CLARITY) fails to pass, financial institutions are unlikely to halt their expansion in the digital asset sector as a result.
The Senate is expected to vote on the CLARITY Act. If passed, the bill could provide banks, brokers, and asset management companies with clearer regulatory guidance, further clarifying how they can trade digital assets and develop products around digital assets. Although approval of the bill could accelerate the advancement of related businesses and attract more traditional financial institutions into the market, the obstacles created by its failure to pass may no longer be as significant as they once were.
Chris Crawford, a digital assets partner at Fenwick, said that the CLARITY Act would be “extremely favorable and beneficial to Wall Street’s adoption of this technology,” but it is not a necessary condition for financial institutions to conduct related businesses.
In fact, although the scope of securities and commodities laws in the digital asset sector has long been uncertain, traditional financial institutions have already entered the crypto market through exchange-traded funds, tokenization platforms, and other digital asset products. Therefore, the CLARITY Act may make relevant decision-making processes clearer, but that does not mean Wall Street’s crypto expansion must begin with the bill.
Crawford pointed out that once the bill passes, companies will find it easier to determine which digital assets qualify as commodities and how those assets should be traded. At the same time, clearer regulatory boundaries will also help companies understand which aspects should be regarded as digital securities when brokers and trading platforms handle related assets.
He said that within institutions involved in cryptocurrency, companies will find it easier to determine the applicable regulatory framework, regardless of the form in which digital assets exist.
Wall Street’s Expansion May Accelerate Because of the Bill’s Setback
If the CLARITY Act fails to secure enough votes on Tuesday, the extent to which Wall Street’s digital asset development will be affected remains a key market concern.
Brian Vieten, a senior research analyst at Siebert Financial, believes that passage of the bill could provide U.S. financial companies with a “green light,” encouraging them to accelerate blockchain investments, launch tokenized products, and establish business foundations in the digital asset industry through acquisitions.
However, in his view, the bill’s failure could instead produce an unexpected driving force by encouraging some companies to accelerate their actions.
Vieten said that U.S. companies already have strong economic incentives. Under the relatively favorable regulatory environment at present, companies may accelerate product launches and the advancement of tokenization businesses, extending related plans into 2027 and 2028. If the CLARITY Act fails to pass, some activities may begin earlier rather than being canceled outright.
He further pointed out that regardless of the voting result, Wall Street’s construction of digital asset infrastructure will continue to advance.
At present, companies have already begun to identify business opportunities in tokenization and digital asset businesses. If Congress is unable to formally incorporate the new regulatory direction into law, some companies may choose to launch products by taking advantage of the relatively favorable environment in the short term, rather than waiting for future governments or regulatory agencies to adjust their policies.
Meanwhile, relevant agencies of the U.S. Securities and Exchange Commission (SEC) and the U.S. Commodity Futures Trading Commission (CFTC) have already begun developing rules for the digital asset sector. Even if the legislative process fails to make progress, these regulatory efforts may still provide some support for institutional investors participating in the market.
Robinhood is also actively expanding its cryptocurrency and tokenized securities businesses. The company has publicly expressed support for the CLARITY Act and is working to promote bipartisan support.
Michael Ahern, vice president of U.S. government affairs at Robinhood Markets, said that Robinhood has long advocated establishing clear regulatory guidelines for digital assets while maintaining appropriate consumer protection alongside innovation. He believes that the CLARITY Act is a positive step, and the company will continue to seek bipartisan support in the U.S. Senate.
However, the bill’s political progress still faces many challenges.
Tuesday’s vote will require support from a large number of Democratic senators to overcome the Senate’s 60-vote threshold. Ethics provisions are also one of the key unresolved issues at present. The provisions prohibit the U.S. president and other senior government officials from conducting business in the digital asset sector. At the same time, Trump has reached an agreement on most of the ethics provisions in the new text released on Sunday.
In addition, the bill also involves issues such as how cryptocurrency regulatory authority should be divided and what trading methods digital commodities should adopt. Stablecoin reward mechanisms are also controversial. Banking groups worry that interest-like payment methods could lead to the loss of bank deposits, and therefore urge lawmakers to implement stricter regulations. On Monday, eight banking trade organizations again expressed this concern in a letter to Senate leaders.
Institutional Investors Are No Longer Waiting for Regulation to Be Implemented
For professional investors, the direct impact of the CLARITY Act vote may be relatively limited.
Ryan Rasmussen, a research analyst at Bitwise, said that the bill is certainly important, but its impact is not as significant for individual professional investors or large platforms that have already allocated Bitcoin in model portfolios.
Rasmussen revealed that over the past three months, investors have frequently asked Bitwise about the progress of the CLARITY Act, but the uncertainty surrounding the bill has not become a major factor preventing them from allocating to crypto assets.
He said that investors will not remove crypto assets from their portfolios simply because the CLARITY Act fails to pass.
This situation also reflects the changing way institutions are adopting cryptocurrency.
The spot Bitcoin ETF launched in 2024 provided professional investors with another channel to enter the Bitcoin market. At the same time, large financial institutions have continued to expand their own digital asset businesses.
Crawford believes that if the CLARITY Act ultimately fails, crypto-native companies may continue to enjoy the advantages brought by regulatory gray areas for a period of time. However, in his view, this advantage cannot be maintained over the long term.
Ultimately, he said, Wall Street “will catch up.”