The debate around the CLARITY Act and market structure is set to dominate crypto discourse in 2026
getty
With the passage of the CLARITY Act by the House of Representatives in July 2025 hopes were high that comprehensive market structure and regulation would soon be coming to the crypto space. Despite these hopes, however, the Act has stalled since, with a much anticipated hearing by the Senate Agriculture Committee postponed until the end of January, which was originally schedule to take place simultaneously with the markup session being held by the Senate Banking Committee on the same day. This delay seems to be communicating that political leadership does not believe the Act, at least in its current form, will have the votes to pass through the Senate. Setting aside the partisan nature of Washington D.C., where it often looks like policymakers are more interested in scoring political points versus effective governance, there are a few reasons why the Act remains stalled, as well as a few key points within the proposed amendments that stand situated to dominate crypto policy debates well into 2026.
Several of the key components of the CLARITY Act that have contributed to it being stalled through the approval process include the fact that the Act 1) bifurcates the crypto market by legally defining which tokens fall under SEC versus CFT C oversight, 2) creates federal rules for crypto exchanges, brokers, and custodians, which would also include asset segregation policies and surveillance standards. In short, the Act strives to replace the rule-making by enforcement paradigm that had, until recently, dominated the SEC’s approach to the sector. Interestingly, Coinbase’s withdrawal of support for the current version of the Act further highlights the fact that despite progress, law-making for crypto remains a broad and multifaceted issue.
While the scope of CLARITY might seem broad, some of the key amendments that have been put forward illustrate how significant this singular piece of legislation has become; let’s take a look at a few of them.
Crypto Policy Is Far-Ranging
Out of the over 75 amendments that have been put forward one item that stands out is how widespread the proposed changes might be for the legislation. Although stablecoins, and the ability of issuers to deliver yield on these instruments (more on that below), are leading the conversation the scope of proposed amendments include areas such as DeFi, government corruption prevention measures, and software developer protections. Such an all-encompassing approach to policy related to crypto has also raised concerns from Galaxy Research, which in a recent report stated that the latest (as of then) Senate draft of the market structure bill would be the largest expansion of financial surveillance powers since the USA PATRIOT ACT.
Specifically the proposed new tool that would allow the Treasury Department to impose special and crypto-specific measures on digital-asset related transactions, introduce a temporary hold mechanism to freeze transactions almost instantly, and the explicit expansion of AML obligations could create additional obstacles to crypto development, especially DeFi applications. No matter what occurs to these proposed changes the fact remains that crypto conversations have expanded and advanced in real-time.
Stablecoin Treatment Dominates The Dialogue
In what should come as a surprise to virtually no one familiar with the crypto market and investing landscape, the debate surrounding stablecoins and stablecoin yield lay at the center of fierce debate between banking lobbyists and the crypto lobbying community. Building on the success following the passage of the GENIUS Act into law, the crypto industry has moved forward aggressively with preparing business plans for offering rewards programs for stablecoins. Stablecoins could not, under these provisions, offer yield on stablecoins directly, but certain affiliates and third parties were not prevented from doing so. For example, exchanges and platforms such as Coinbase can share back a portion of benefits generated by an issuer generated via interest from reserves underpinning stablecoins.
Bankers and the banking lobby, almost from the moment these provisions became widely understood, have been pushing for a change to these rules, albeit after the legislation was signed into law. This debate has spilled over into the market structure debate, and threatens to derail or at least significantly delay, the passage of this clarifying legislation. Debates over deposits, rewards, and interest paying ability do not look set to de-escalate in the short to medium term, with industry leaders including JP Morgan Chase and Coinbase weighing in publicly on top of efforts directly focused on policymakers.
Crypto Policy Is At A Pivot Point
The crypto sector, after a successful 2025 from both a policy and adoption perspective, has been actively working on generating additional wins as 2026 gets underway, with the passage of the market structure bill at the center of these initiatives. As the amendments and political machinations take over from the lobbyists at a certain point, this fact cannot be overlooked. Like any other asset class, crypto and crypto-related products and services depend on clear, consistent, and enforceable rules to prosper and grow moving forward. Some of the amendments put forward might not be favored by certain sectors of the crypto space, but obtaining clarity and consistency for the broader marketplace is imperative. Engaging with lobbyists, on both sides of the aisle, will be an important part of this process, even if certain high profile policymakers have seemingly staked out either pro and anti-crypto positions.
Crypto market structure is essential for the sector to continue to grow, and that is making the future of this legislation one of the most important issues for the industry of 2026.
