Well, it seems the path forward for a major crypto market structure bill just got a bit more complicated. While the House managed to pass the GENIUS Act with a surprising amount of bipartisan support, the same level of ease isn’t expected for the Senate’s counterpart. It’s a different beast entirely, and key figures are starting to acknowledge the uphill battle.
Before everyone turns their attention to Fed Chair Powell at Jackson Hole, other officials out in Wyoming were already setting the stage. We heard from US Sen. Tim Scott, who chairs the Senate Banking Committee, and SEC Chair Paul Atkins. There was, of course, the expected political praise. But if you listened a little closer, there were some actual policy nuggets buried in there.
A More Complicated Legislative Fight
Senator Scott addressed the market structure legislation his committee introduced last month. This thing is a discussion draft that builds on the CLARITY Act from the House. The main goal is to define what an “ancillary asset” is—basically, trying to draw a clearer line around which digital assets aren’t securities. It also pushes the SEC to adapt its existing rules to fit the crypto world.
Scott seemed hopeful, suggesting he might get between 12 and 18 Democrats to back it. But he was also pretty frank. He called it a “far more complicated piece of legislation.” And he pointed to Senator Elizabeth Warren as a “real force to overcome” for any Democrats who might otherwise be willing to come on board. That doesn’t sound like a sure bet.
Patrick Daugherty, a lawyer specializing in this area, echoed that sentiment. He stressed that what the House passed and what the Senate is considering are very different animals. The CLARITY Act, he explained, would offer real protections. It could help blockchain projects raise money without constantly worrying about an SEC crackdown for failing to register. Exchanges would get more clarity on which tokens they can list.
Jurisdictional Tug-of-War and Future Rules
One of the biggest sticking points is always jurisdiction. The House’s CLARITY Act tries to split the baby, giving both the SEC and the CFTC a piece of the regulatory pie. The idea is that oversight could shift between the agencies as the technology itself evolves.
But the Senate draft, at least from Scott’s committee, leans more heavily on the SEC to handle rule-making. Complicating matters further, the Senate Agriculture Committee—which oversees the CFTC—is expected to drop its own draft focused on digital commodities soon. So we might be heading for a bit of a turf war behind the scenes.
Daugherty made a key point that’s often missed: even if a bill passes, the job isn’t done. “Will CLARITY clarify the law? Yes, but less than some would like,” he said. It would kick off a long process of agency rule-making and legal interpretation. It’s a start, not a finish.
The SEC Chair’s Flexible Approach
SEC Chair Atkins, for his part, spent his time talking about flexibility. He dismissed the idea of a turf battle, emphasizing a need to avoid putting new tech into “little cement-surrounded pockets that are immutable.” His “super-app” approach seems to be about creating a regulatory framework that can adapt over the next five or ten years, which he admits will look completely different.
He argued that a little friendly competition between agencies is healthy. It prevents any one regulator from becoming, in his words, “too obstinate.” It’s a pragmatic view, but it also feels a bit idealistic given the current political climate. Making laws is one thing;
