Key Points
- Paul Atkins announced that the SEC is "ready, willing, and able" to establish crypto regulations if the Clarity Act does not pass.
- He emphasized that a law is essential to prevent regulatory changes with each new administration.
- The Clarity Act has passed both the House and Senate Banking Committee but awaits a Senate floor vote.
According to SEC Chairman Paul Atkins, the agency will take it upon itself to draft regulations for the cryptocurrency market if Congress does not enact the Clarity Act. Speaking to CNBC on Monday, he stated that the SEC is "ready, willing, and able to come out with rules" in the absence of the bill's passage through the Senate.
Atkins remarked, "Statute is the way to future-proof something," asserting that the market requires the "certainty of a statute" to avoid shifts in regulatory frameworks with changing administrations. He expressed hope that Congress would ultimately approve the legislation and mentioned that the SEC is providing technical support, a point he reiterated on Tuesday through a post on X, affirming his commitment to assist Congress in advancing the bill.
Current Status of the Bill
The Clarity Act was approved by the House with a vote of 294-134 in July of the previous year and subsequently cleared the Senate Banking Committee with a 15-9 vote in May, facing opposition from nine Democrats. However, it has yet to be voted on by the full Senate, where it requires 60 votes to pass, and the Senate is set to recess in August. If enacted, the bill would grant the Commodity Futures Trading Commission (CFTC) exclusive authority over spot markets for digital commodities, effectively placing most tokens beyond the SEC's jurisdiction.
Recently, Senate Democrats have voiced their opposition to the latest iteration of the bill, criticizing the proposed ethics provisions concerning officials' cryptocurrency transactions as inadequate. Additionally, the issue of whether stablecoins can generate yield remains unresolved.
Last week, Senate Majority Leader John Thune indicated to reporters that the Clarity Act is unlikely to pass before the August recess, leading the Senate to temporarily set the bill aside.
Alternative Plans
The SEC has already initiated preparations for a backup plan. Atkins's Project Crypto, unveiled in November, comprises a proposed Regulation Crypto rulemaking package slated for the agency's 2026 agenda. This package includes provisions for token registration exemptions, a safe harbor for decentralized projects, and guidelines for broker-dealer custody and trading venues. Atkins has referred to this initiative as a transitional measure leading to the Clarity Act.
However, the limitations of this approach are crucial to note. The SEC and CFTC's guidance from March, which classified 16 tokens—including Bitcoin and Ethereum—as digital commodities, is merely administrative and can be revoked by a future administration without congressional approval.