Clarity Act Stalls in Senate, Leaving Crypto Industry in Limbo

The recent failure of the Senate to pass the Clarity Act has left the crypto industry in a state of limbo, but experts say it's actually a win for US banks and overseas crypto hubs like Dubai.

With the Clarity Act stalled, the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) will continue to shape policy through existing rules, interpretations, and exemptions.

'Banks won this round. But the reason they are fighting so hard is that banks increasingly see stablecoins as competition for deposits, not just another crypto product,' said Anton Golub, head of exchange go-to-market at Forte.

The immediate outcome of the failure to pass the law means that crypto regulations in the United States will continue to be created outside Congress. The SEC has already moved quickly, issuing a temporary conditional exemption for eligible venues to trade tokenized U.S. stocks through permissioned liquidity pools on public blockchains.

In contrast, Dubai is thriving as a crypto hub, with over 110 regulated virtual-asset businesses operating in the country and about 20 more holding in-principle approvals, according to Irina Heaver, a Dubai-based crypto lawyer and founder of NeosLegal.