Treasury Secretary Bessent Urges Passage of Crypto Clarity Act Amid Global Competition

Treasury Secretary Scott Bessent is intensifying calls for Congress to pass the Crypto Clarity Act, asserting that it is crucial for the United States to maintain its competitive edge in the global technology race. Bessent warns that failure to act could result in crypto innovation migrating to jurisdictions like Singapore and Abu Dhabi, which already have clear regulatory frameworks.

Characterizing the legislation as being at the “1-yard line,” Bessent noted that while the bill passed the House in July 2025 and cleared the Senate Banking Committee with a 15-9 vote in spring 2026, it still awaits a full Senate vote as of September 2026.

Details of the Crypto Clarity Act

The proposed legislation aims to establish a federal regulatory framework for digital assets, delineating oversight responsibilities between the SEC and the CFTC. The SEC would regulate tokens resembling securities, while the CFTC would oversee those functioning more like commodities. Additionally, the bill outlines disclosure requirements for digital asset platforms, sets anti-money laundering standards, and provides pathways for companies to register with regulators.

Bessent has linked the legislation to broader administration priorities, emphasizing that a clear domestic framework could mitigate risks associated with unregulated offshore activities.

Challenges in the Senate

The Crypto Clarity Act faces hurdles in the Senate, requiring 60 votes to overcome a filibuster, which necessitates significant bipartisan support. Key sticking points include the regulation of stablecoin yields and ethics provisions concerning conflicts of interest for government officials holding digital assets. Furthermore, there are concerns about compliance obligations for developers of decentralized protocols.

In response to the legislative impasse, the crypto industry has ramped up lobbying efforts to advocate for the bill.

Market Reactions

Markets have reacted positively to Bessent's advocacy, with Bitcoin and shares of crypto companies like Coinbase experiencing upward movement. Current prediction markets estimate a 16% chance of the Crypto Clarity Act being enacted this year.

New Developments on the CLARITY Act

• The CLARITY Act is currently facing opposition from 18 state attorneys general, led by New York’s Letitia James.
• Concerns have been raised that the bill could undermine state-level regulatory powers, including licensing and antifraud enforcement.
• Market pricing indicates a decreased likelihood of the CLARITY Act's passage, with current odds for it becoming law in 2026 at 27.5% YES.
• A crucial procedural vote in the Senate is imminent, which will significantly impact the future of the CLARITY Act.
• Key political figures, including President Trump and Senate Banking Committee Chairman Tim Scott, may influence support for the bill.
• Further statements from state attorneys general or federal lawmakers could also affect market perceptions regarding the bill's prospects.

New Insights from Patrick Witt on Stablecoins

Patrick Witt, Executive Director of the President’s Council of Advisors for Digital Assets, publicly challenges the banking industry's claims regarding stablecoin yields potentially causing a massive deposit exodus. He argues that the banking sector's concerns are inconsistent and not supported by market evidence.

In July 2026, 134 banking executives signed a letter advocating for stricter measures against yield-bearing stablecoins, fearing they could lead to significant outflows from traditional banks. Witt criticized this stance, suggesting it stems from "greed or ignorance." He pointed out that the anticipated deposit flight has not occurred despite the existence of yield-bearing stablecoins.

Witt also highlighted that compliant stablecoins, under the GENIUS Act framework, could actually attract new capital into the US banking system, as foreign investors might seek dollar-denominated yields through US-backed stablecoins.

The ongoing legislative discussions surrounding the CLARITY Act, aimed at establishing clear rules for digital assets, have yet to yield a resolution. Senators Tillis and Alsobrooks are working on compromise solutions regarding yield provisions, but progress remains stalled.

Witt's position as a senior White House advisor gives him significant influence, and his public critique of the banking lobby indicates a shift in the administration's stance towards supporting the crypto industry.

New Developments on the CLARITY Act

• Opposition to the CLARITY Act has increased as of September 14, with banks, Democrats, state attorneys general, and developer advocates rejecting key compromises.
• Senate Republicans released what they termed the final version of the bill, which includes 126 substantive changes requested by Democrats.
• Democrats have raised concerns about the strength of ethics restrictions related to President Donald Trump's financial interests in crypto.
• New York Attorney General Letitia James leads a coalition of 17 attorneys general opposing the bill, citing potential weakening of state enforcement powers.
• Banking groups argue that the proposed Treasury "circuit breaker" for stablecoins allows damage to occur before regulators can respond effectively.
• Developer advocates expressed disappointment over the removal of explicit protections related to unlicensed money transmitting businesses under 18 U.S.C. Section 1960.
• Concerns persist regarding the bill's impact on tribal gaming laws, with the Indian Gaming Association seeking explicit protections that were not included in the final text.
• Despite opposition, support for the legislation remains strong within parts of the technology and crypto industries, with Y Combinator expressing optimism about clearer regulatory responsibilities.

New Developments on the Clarity Act

• Senator Cynthia Lummis has credited President Donald Trump for agreeing to stringent ethics restrictions to facilitate the passage of the Clarity Act.
• The Clarity Act aims to clarify the regulatory framework for digital assets, distinguishing between securities, commodities, and stablecoins.
• A vote on the Clarity Act is scheduled for tomorrow, with Lummis emphasizing that a no vote would undermine significant ethics reforms and consumer protections.
• The updated draft of the Clarity Act includes new enforcement powers for state attorneys general.
• Lummis has stated that the Clarity Act has faced delays due to conflicts between the banking lobby and crypto companies regarding stablecoin yields.

New Developments on the Strategic Bitcoin Reserve Bill

• The House Financial Services Committee will mark up H.R. 8957, the American Reserve Modernization Act of 2026, on September 16, 2026.
• This bill aims to establish a Strategic Bitcoin Reserve managed by the Treasury Department, transforming an executive order into federal law.
• Introduced by Rep. Nick Begich (R-AK) on May 21, 2026, the bill has over 20 co-sponsors, including Democratic Rep. Jared Golden of Maine.
• The legislation imposes a mandatory 20-year lockup on all Bitcoin held in the reserve, prohibiting trades, swaps, or sales.
• It mandates quarterly proof-of-reserve reports by third-party auditors and requires the Treasury to set up secure storage for Bitcoin holdings within 180 days of enactment.
• The reserve will primarily consist of Bitcoin seized through criminal and civil forfeitures, with no new market purchases or taxpayer dollars involved.
• A separate Digital Asset Stockpile will be created for non-Bitcoin digital assets, indicating the government's holdings of various tokens.
• The bill builds on a March 2025 executive order from President Trump, which consolidated seized Bitcoin into a single reserve and prohibited their sale for 20 years.
• The 20-year lockup is expected to significantly affect Bitcoin's supply dynamics, enhancing scarcity calculations.
• Wednesday's markup is a committee-level event and does not represent a final vote; the bill must still pass the full House and Senate before reaching the president.

New Developments on the Clarity Act

• A bipartisan group of 17 state attorneys general has expressed concerns over the Clarity Act, arguing it does not adequately protect crypto investors from scams and fraud.
• The latest version of the Clarity Act, released by Senator Cynthia Lummis, includes a ban on federal officials from engaging with digital assets.
• The bill aims to place digital assets under the regulatory oversight of the Commodity Futures Trading Commission (CFTC).
• Opposition has arisen from traditional financial institutions, citing potential risks to financial stability.
• A procedural vote on the Clarity Act is scheduled, requiring 60 votes to proceed to debate and a formal vote.
• Recent betting odds on Polymarket indicate a slight increase in confidence for the bill's passage, rising from 17% to 26% this week.