The debate over the U.S. digital asset market structure bill known as the CLARITY Act has turned on a narrower question this year: not whether the bill should exist, but who gets to write it.
In the republished article by Cleve Mesidor, even Senator Elizabeth Warren, long seen by the industry as one of crypto's toughest critics, is described as wanting a seat at the table. Since the Senate version of the bill was rejected in January, the list of groups seeking to shape the text has kept growing.
Armstrong says his January opposition was about the draft's flaws
Coinbase Chief Executive Officer Brian Armstrong recently used social media to explain why he opposed sending the draft bill to committee earlier this year. He said the proposal still had major problems in provisions tied to decentralized finance, or DeFi, tokenization, Commodity Futures Trading Commission, or CFTC, authority, and stablecoin yield.
Armstrong wrote: "In January, I opposed moving the draft bill to committee because it still had major issues to fix in DeFi, tokenization, CFTC authority, and stablecoin yield provisions. At the time, the draft had serious flaws that would have harmed the crypto industry; support was badly split, and the bill could not have passed. We worked with many parties to revise it so it had a path to passage. In the new draft submitted to committee about four months later, all four of the issues I raised had been fixed. I'm proud of that work, and if I had to do it again, I would, because it helped produce a better bill. This is only one step in a long process."
The article says many stakeholders responded to Armstrong's January move in roughly the same way: they also wanted to help rewrite the bill. One group after another stepped forward, each saying it wanted to make the legislation better.
Banks, enforcement officials and policy experts all entered the fight
Banks were the first to object to the changes Armstrong backed, according to the article. That dispute later led the White House to hold several small meetings with crypto executives and bank leaders.
Enforcement officials then raised their own concerns, focusing on developer protections and the risk of illicit finance.
The piece also points to disclosure filings released in June showing that President Trump had $1.4 billion in crypto-related gains. That, it says, increased bipartisan calls for ethics provisions in the bill.
At the same time, regulatory specialists kept warning that both the CFTC and the U.S. Securities and Exchange Commission, or SEC, were dealing with commissioner vacancies. The political tug-of-war between the legislative and executive branches over the crypto lawmaking process has also shaped how the broader industry reads the situation.
Even so, bipartisan lawmakers on the Senate Banking Committee and the Agriculture Committee are still negotiating in search of a compromise that could move the bill forward.
After the failed final vote, stakeholders are still planning for the next round
Nearly two weeks have passed since the CLARITY Act failed on a final vote. The article says policy advocates on opposing sides are still reviewing what happened, while nearly all of them continue to say they want a better version of the bill.
Different camps are now looking at different paths ahead.
- Some are looking to the lame-duck session after the midterm elections in hopes of reviving the bill.
- Others want financial regulators to fill the gap directly through rulemaking.
- Another view is that the bill is already dead.
Still, the article says most stakeholders are already planning for the next Congress behind the scenes. Whether Democrats retake the House or gain control of both chambers, outside groups will need stronger bipartisan strategies.
Banks and crypto trade groups say they will keep pushing
The Bank Policy Institute, or BPI, said in a statement on the failed final vote that its member institutions would not walk away from the effort.
BPI said: "The U.S. banking industry continues to support a durable, long-term digital asset regulatory framework that will set the foundation for America's global leadership for decades to come. We believe Congress can achieve that goal while also protecting the bank credit activities that support economic growth. As lawmakers consider next steps, we recommend targeted changes to stablecoin yield policy. We are ready to work with all stakeholders to achieve this important goal."
Crypto trade groups have taken the same position. Blockchain Association CEO Summer Mersinger said last Friday that she will step down, and the group's founding leader Kristin Smith will return as interim CEO.
After the vote, Mersinger said: "The work to deliver long-awaited consumer protections and clear rules for digital asset users and entrepreneurs in the United States is not over. Tens of millions of Americans hold digital assets, but builders in the United States still do not have clear federal rules; Europe, the United Kingdom, Singapore, the United Arab Emirates, and Japan already have their own frameworks in place... We will not stop until the industry has clear rules in the United States."
Republican negotiators central to the talks are leaving
The article argues that a bigger shift may come from the departure of several officials who have served as key bridges in crypto policy and regulatory debates over the past decade.
Senator Thom Tillis of North Carolina will not seek a third term and is set to leave office at the end of the year. The article says he worked with Maryland Democrat Angela Alsobrooks on a compromise tied to yield provisions and with Arizona Senator Ruben Gallego to push the White House toward stronger bipartisan ethics language.
Senator Cynthia Lummis of Wyoming also decided not to run for another six-year term and said she would return to her ranch. Lummis chairs the Senate Banking Committee's digital assets subcommittee and has led the CLARITY Act effort. The article describes her as a lawmaker with a reputation for bipartisan work and notes that she previously worked with New York Senator Kirsten Gillibrand on the GENIUS Act. Her departure, it says, will be hard to replace.
The SEC is also losing a key voice
The main regulator tied to the CLARITY Act is facing turnover as well. SEC Commissioner Hester Peirce is set to finish her second term this Friday and return to academia.
The article says Peirce has been one of the most influential figures in crypto regulation since 2018. Before her Oct. 2 departure, she wrote on X last week to the White House: "One subtle but vital task of a regulator is to preserve, within a sensible regulatory framework, as much freedom as possible for people to make the best choices for themselves and their families, and to do so with confidence in transacting. As I leave office, I am confident that under the excellent leadership of Chairman Paul Atkins and Commissioner Mark Uyeda, the talented team at the SEC will continue to maintain that balance."
When Washington returns to the issue and tries again to build a durable policy framework that supports innovation and U.S. competitiveness, the exits of Peirce, Lummis and Tillis are likely to matter.
The next Congress will have to rebuild the coalition
For the 120th Congress, the task will be to bring together crypto trade groups, bank lobbying organizations, enforcement officials, compliance bodies and other parties that want to revise the digital asset market structure bill. Only then could a bill reach the president's desk and move into the more complicated rulemaking stage that follows.
The article notes that Congress has never passed a bill that satisfied every side. That makes the goal difficult from the start. A bipartisan compromise, it says, remains the version most likely to survive the legislative process.
Mesidor closes by arguing that organizations with deep relationships in both parties may be in the strongest position to help the next Congress draft a new version of the CLARITY Act.