Crypto Finds New Path Forward with Regulators After Congress Fails

The crypto industry's strategy of relying on Congress to pass legislation has been put on hold after the Senate failed to advance the Clarity Act. The bill, which aimed to provide market structure for digital assets, was seen as a way to bring clarity to the sector and facilitate its growth.

However, with the bill's failure, regulators have stepped in to fill the vacuum. Within 48 hours of the Senate vote, the SEC unveiled an innovation exemption for tokenized U.S. stocks, allowing qualifying venues to trade them on-chain without registering as national securities exchanges.

The CFTC also moved quickly, issuing a no-action position that lets passive software providers give users access to regulated derivatives without registering as introducing brokers. The agency has also sent a broader crypto-markets rulemaking to the White House for review.

The Federal Reserve proposed rules requiring stablecoin issuers to fully back their tokens with safe, liquid assets and hold capital against operational risks under the GENIUS Act.