Clarity Act Advances, but Tax Reform and Quantum Readiness Loom
The Digital Asset Market Clarity Act is gaining momentum in the US Congress, clearing the House on a 294-134 vote in July 2025. The bill now awaits floor action and has been reported out of the Senate Banking Committee in June. Passing this legislation should be a priority as it will bring much-needed clarity to the regulation of digital assets.
The current patchwork of enforcement actions, conflicting or unclear guidance, and activity migrating to overseas jurisdictions is hindering US innovation. The Clarity Act draws a workable line between the SEC's and CFTC's authority, defines when a token is a security versus a commodity, and gives developers and custodians rules they can build compliance programs around.
However, market structure is only half the equation, and tax compliance is where reform is lagging behind. The proposed PARITY Act has been put forward, but progress remains stuck in slow gear. As of the 2025 tax year, brokers must issue Form 1099-DA, with cost basis reporting set to start for the 2026 tax season.
Standardized reporting is a good thing in principle, but it often reports gross proceeds with no reliable cost basis, fails to capture holding periods, and ignores non-custodial activity entirely. This results in fragmented, inaccurate data that lands on preparers and their clients, who are left reconciling thousands of transactions across exchanges, wallets, and protocols.
Two fixes would make an outsized difference: treating exchange-level reporting as a flag for unreported activity rather than a definitive ledger, and enacting a real de minimis exemption. Under current law, buying a $4 coffee with appreciated Bitcoin is a taxable event requiring a capital-gains calculation, which is the same treatment as a six-figure sale.
The US must also prepare for the quantum threat. Blockchains rely on public-key cryptography, which a sufficiently powerful quantum computer can break. The June 2026 executive order accelerating federal migration to post-quantum standards reflects how seriously Washington now takes it.