The crypto industry, Wall Street, and the Trump Administration all agree on one thing: the Digital Asset Market Clarity Act (CLARITY Act) is the bill that matters most for institutional crypto adoption, yet it remains stalled in the Senate short of the 60 votes needed to pass. Since President Donald Trump's first executive order on digital assets in January 2025, the U.S. has passed its first stablecoin law, the House passed a sweeping market structure bill, and federal agencies have launched major rulemakings. But without Senate passage of the CLARITY Act, the regulatory landscape remains fragmented and uncertain for banks, financial institutions, and crypto companies trying to navigate compliance.

What Would the CLARITY Act Actually Do for Institutions?

The CLARITY Act would establish the first federal rulebook for digital asset market structure, splitting jurisdiction between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). The bill would create a new "digital commodity" category distinct from a security and set up registration requirements for digital commodity exchanges, brokers, dealers, and custodians. The House passed it on July 17, 2025, by a comfortable 294-134 margin, with 78 Democrats joining Republicans as part of the chamber's "Crypto Week." However, the Senate has taken a more circuitous route that is still ongoing.

The Senate Committee on Agriculture put out its own market structure draft in January 2026 and pushed through companion legislation, the Digital Commodity Intermediaries Act, on a party-line 12-11 vote on January 29. The Committee on Banking then marked up its own version of the CLARITY Act and advanced it 15-9 on May 14, with two Democratic senators crossing over to vote yes. The bill landed on the Senate's legislative calendar on June 1, and U.S. Department of the Treasury Secretary Scott Bessent and the White House spent weeks publicly pushing for a floor vote and enactment by July 4. As of late July 2026, Senate Majority Leader John Thune still had not scheduled floor time, and the bill remained short of the 60 votes it needs for cloture.

Where Are the Sticking Points Blocking Senate Passage?

The obstacles to passage are familiar to anyone who has followed the crypto policy debate. Key disagreements center on how to treat decentralized finance (DeFi), a system where financial transactions occur directly between users without a central intermediary; how far anti-money laundering (AML) and Bank Secrecy Act (BSA) reporting should reach; an unresolved ethics provision touching on federal officials' own crypto holdings; and reconciling three different versions of the bill. Prediction markets and industry watchers now put the odds of enactment this year somewhere between 45 percent and 60 percent, and many see August as the real deadline before the Senate calendar fills up with appropriations and midterm politics.

For banks and financial institutions, this legislative uncertainty creates a compliance headache. Without clear federal rules, institutions must navigate a patchwork of state and federal guidance while regulators continue writing rules on their own authority. The Trump Administration has not been sitting idle during the Senate's deliberations, however.

How Is the Trump Administration Moving Forward Without Congress?

On January 23, 2025, in his first week back in office, President Trump signed Executive Order 14178, "Strengthening American Leadership in Digital Financial Technology." It undid the prior administration's digital asset policies, laid out a pro-innovation framework, and created the President's Working Group on Digital Asset Markets, chaired by White House Special Advisor for AI and Crypto David Sacks. In March 2025, a second executive order established a Strategic Bitcoin Reserve and a U.S. Digital Asset Stockpile to be funded with digital assets the government has already forfeited.

On July 30, 2025, the Working Group delivered its mandated report, running more than 160 pages with over 100 recommendations organized around five key areas. The report urged Congress to build on the CLARITY Act by giving the CFTC clear jurisdiction over spot digital commodities and recognizing DeFi as its own category. It also told the SEC and CFTC not to wait for legislation but to use the authority they already have to let crypto trading happen at the federal level. This report is effectively the Trump Administration's scorecard, and it is shaping every rulemaking described below.

Under Chair Paul Atkins, the SEC has formally retired what it used to call "regulation by enforcement" against crypto. The agency is now writing rules and issuing guidance instead, coordinated through its Crypto Task Force under Commissioner Hester Peirce. The biggest move so far came on March 17, 2026, when the SEC and CFTC jointly published an interpretive release sorting digital assets into five buckets: digital commodities, digital collectibles, digital tools, payment stablecoins (as defined by the Guiding and Establishing National Innovation for U.S. Stablecoins Act, or GENIUS Act), and digital securities, with only the last bucket still subject to federal securities law. The release classifies bitcoin, ether, Solana, and XRP as non-security digital commodities.

What Regulatory Actions Are Agencies Taking Right Now?

• SEC Framework: At the SEC Speaks conference in March 2026, Chair Atkins introduced an "A-C-T" framework (Advance, Clarify, Transform) as the organizing idea behind the agency's 2026 agenda. A July 7 statement confirmed the SEC is working on a formal test for when a crypto asset stops being an investment contract, an "innovation exemption" allowing limited trading of tokenized securities on new kinds of platforms, a rule creating capital-raising pathways for crypto offerings, a custody rule letting broker-dealers hold non-security crypto assets including payment stablecoins, and an update to transfer agent rules to accommodate blockchain-based recordkeeping.
• CFTC Perpetual Futures: The CFTC has been moving in lockstep with the SEC under "Project Crypto," the two agencies' joint effort to align their rules. On May 29, 2026, the CFTC approved the first true bitcoin perpetual futures contract for listing on a designated exchange and put out a policy statement inviting more perpetual contracts on other spot digital commodities, a real step toward bringing offshore perpetual trading volume onshore under the CFTC's watch.
• Margin Collateral Guidance: Two of the CFTC's divisions have also issued guidance on frequently asked questions, building on earlier no-action letters, letting futures commission merchants accept payment stablecoins, bitcoin, and ether as margin collateral, with capital charges and other conditions attached.

The regulatory momentum is real, but the CFTC's current short staffing has stalled some progress. For institutional investors and Wall Street banks, the combination of regulatory momentum without legislative certainty creates both risk and opportunity. Banks and crypto companies are preparing for multiple scenarios: a CLARITY Act passage that would provide clear federal rules, or a continuation of agency-by-agency rulemaking that could leave gaps and inconsistencies.

The stakes are high. Institutional crypto adoption depends on clear custody rules, market structure definitions, and regulatory certainty. Without the CLARITY Act, institutions will continue to operate in a gray zone where federal agencies are writing rules but Congress has not yet provided the legislative framework. Industry observers expect the Senate to make a final push in August before the legislative calendar fills up with other priorities and the focus shifts to midterm election politics.