While the Clarity Act aims to clarify regulations for banks and brokers dealing with digital assets, the momentum in crypto adoption is likely to continue regardless of the bill's outcome.
By Helene Braun, AI Boost|Edited by Aoyon Ashraf17 hrs ago4 min readMake preferred on ShareShare this articleCopy linkX (Twitter)LinkedInFacebookEmailMake preferred on Wall Street is proactively engaging in crypto initiatives. (Lo Lo/Unsplash)SummaryShow- The Senate is set to vote on the Clarity Act, which could provide clearer trading rules for digital assets.
- Regardless of the bill's fate, Wall Street is poised to continue its crypto expansion.
- Disagreements persist regarding stablecoin rewards and their impact on banking deposits.
As Wall Street anticipates a clearer regulatory framework for cryptocurrency with the potential passing of the Clarity Act, the push into digital assets is expected to persist regardless of the bill's outcome.
The upcoming Senate vote on the Digital Asset Market Clarity Act (CLARITY) aims to offer banks, brokers, and asset managers more definitive guidelines for engaging with digital assets. While the approval of the bill could expedite the process and attract more traditional players to the market, its failure may not significantly hinder ongoing efforts.
Chris Crawford, a digital-assets partner at Fenwick law firm, noted, "It would be hugely helpful and beneficial to Wall Street adoption of the technology, but it is by no means a necessary predicate."
Despite the prevailing uncertainty regarding the application of securities and commodities laws, traditional financial firms have ventured into the crypto space with products like exchange-traded funds and tokenization platforms. While CLARITY could simplify the regulatory landscape, it wouldn’t mark the beginning of Wall Street’s adoption.
Crawford emphasized that the legislation could help define which digital assets qualify as commodities and clarify trading practices, thus providing more certainty for firms handling these assets.
“You would kind of have much easier processes internally, at any shop that touches crypto in whatever form it is, to understand what is the regulatory framework that applies to us,” Crawford added.
Wall Street is moving ahead
What if the Clarity Act fails to pass?
According to Brian Vieten, a senior research analyst at Siebert Financial, the bill's approval could signal to U.S. financial firms to ramp up their investments in blockchain, launch tokenized products, and pursue acquisitions to strengthen their presence in the digital assets market.
However, its failure might spur a counterintuitive response: increased urgency.
“U.S. firms already have an economic incentive to accelerate product launches and tokenization activity into 2027-28 while today’s more favorable regulatory environment remains in place,” Vieten explained. “In that scenario, failure to pass CLARITY could actually pull some activity forward rather than eliminate it.”
“Either way, we think Wall Street’s buildout of digital asset infrastructure continues,” he added.
The rationale is that firms recognize the commercial potential in tokenization and digital assets. If Congress does not establish a new regulatory framework, some firms may choose to launch products while the current environment remains advantageous instead of waiting for future regulatory changes.
For instance, the SEC and CFTC are already progressing with drafting rules intended to aid institutions, even in the absence of the Clarity Act’s passage.
Robinhood, which has aggressively ventured into crypto and tokenized securities, expressed its support for the legislation and is advocating for bipartisan support.
“Robinhood has long advocated for clear regulatory guidelines for digital assets, ensuring innovation can flourish while appropriate consumer protections remain intact,” stated Michael Ahern, vice president of U.S. government affairs at Robinhood Markets. “The Clarity Act is a positive step forward, and we’ll continue to encourage bipartisan support in the U.S. Senate.”
However, the bill faces significant political hurdles ahead of the vote.
To succeed, it requires a significant number of Democratic votes to meet the Senate's 60-vote threshold. The ethics provision, which prevents the U.S. President and other high-ranking officials from engaging in the digital assets sector, has been a major sticking point. Nonetheless, Trump has agreed to most of the ethics provisions in the revised proposal released on Sunday.
Other contentious issues include the division of regulatory authority over cryptocurrencies and the trading of digital commodities. The bill also faces challenges regarding stablecoin rewards, with banking groups pressing lawmakers for stricter regulations due to concerns that interest-like payments could siphon deposits from banks. Eight banking trade groups reiterated these concerns in a letter to Senate leaders on Monday.
Institutions have already made significant strides
For institutional investors, the outcome of the vote may have limited immediate implications.
“It matters, but not that much to the individual professional investor or these large platforms that have model portfolios where they’ve already added bitcoin,” noted Ryan Rasmussen, research analyst at Bitwise.
Rasmussen revealed that investors have frequently inquired about the Clarity Act over the past three months, but uncertainty surrounding the bill has not been the primary barrier to their crypto allocations.
“They’re not going to remove it from their portfolios because CLARITY doesn’t pass,” he affirmed.
This reflects a broader trend in institutional acceptance of cryptocurrencies.
Spot bitcoin ETFs have provided another avenue for professional investors to access crypto, while major financial institutions continue to enhance their digital-asset offerings.
Crawford noted that failure to pass the bill could temporarily maintain an edge for crypto-native companies accustomed to navigating regulatory uncertainties, but he doesn’t foresee this advantage being sustainable. Ultimately, he believes Wall Street will eventually “catch up.”
Clarity ActAI Disclaimer: Some parts of this article were generated using AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards. For more information, see CoinDesk's full AI Policy.Latest Crypto News- 1Crypto Clarity Act barrels toward disappointment barring last-minute Senate turnaround1 hr ago
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