Every policymaker arrives in Washington wanting to leave the country better than they found it. Between us we served nearly 40 years in the House and Senate, and we have learned to recognize the moments — and there are only a handful — when that ambition is available. This week is one of them.
On Sept. 15, the Senate will vote to advance the CLARITY Act, the first comprehensive set of rules governing the crypto industry.
Congress is well known for its inability to pass legislation; recent Congresses have passed the fewest bills in decades. To fill this void in the crypto space, agencies like the Securities and Exchange Commission and the Commodity Futures Trading Commission have attempted to adapt decades-old rules to a new technology. This ultimately creates a patchwork of changing, reactive guidance for both consumers and industries.
CLARITY is one of the first pieces of proactive technology legislation since the Telecommunications Act of 1996, and if it passes, we expect it to be remembered the same way: as the moment America decided to foster and develop an industry rather than litigate it out of the country.
The bill, as the name suggests, provides clarity for the crypto market, which goes beyond speculation and now powers payments, stablecoins, and digital markets — all of which has been widely embraced by traditional financial institutions. In other words, crypto is providing important infrastructure to U.S. businesses and consumers, but it lacks clear standards that protect them.
The CLARITY Act gives all market participants a rulebook they can count on. It tells entrepreneurs which regulator they answer to before they raise a dollar. It gives investors disclosure standards they can compare across products. And it gives banks explicit permission to serve customers on tokenized rails.
That last point is important because some of the most hesitant voices belong to our friends and colleagues in banking. We understand their reluctance to embrace this new technology. But no set of institutions in America is better positioned to win with CLARITY. Banks have the compliance infrastructure, the balance sheets, the customer relationships, and the talent. What they have lacked is permission. Ask any bank general counsel whether they would rather build against a published rulebook or against a regulator’s next enforcement docket.
Banks’ fear that new rails will drain the banking system of deposits is not new. When the GENIUS Act was debated, banks warned that a federal stablecoin framework would drain deposits out of the system. Since it became law, stablecoin issuance has grown, and so have bank deposits, every quarter — eight straight — to a record high above $19 trillion. Stablecoin growth has not come at the expense of bank deposits.
And the question of whether tokenized rails will exist has already been settled — not in Congress, but in the marketplace. Twenty-one major banks are developing a joint stablecoin, the Clearing House launched a tokenized deposit network in June, and stablecoins passed $300 billion in market cap in July.
Tokenized assets are now diversifying beyond U.S. Treasurys into commodities and other real-world assets, such as real estate, equities, and corporate loans. Citigroup estimates $5.5 trillion in financial assets will move onchain by 2030. These markets are opening up 24/7 access and enabling greater liquidity.
The only question left is who writes the rules, and when.
If CLARITY stalls, Congress will hand its lawmaking function to a revolving door of inexpert federal judges and regulators whose interpretations shift arbitrarily with each administration. Firms will keep building, but they will choose the jurisdictions that wrote their rules first. The companies that take advantage of this legal gray zone will be the ones that grow largest — which is how you get another Sam Bankman-Fried and FTX. Clear rules and real disclosure are how you don’t.
And no one can argue that the process has been rushed: the House began laying the groundwork for digital asset legislation in 2021, passed FIT21 in 2024, and passed its revised successor, CLARITY, by an overwhelming bipartisan majority in 2025. The Senate Banking Committee advanced its version 15-9 this May.
Big legislation is never settled in one Congress: members need time to learn the subject, committees need to build institutional memory, and both parties need to test their positions in public. Dodd-Frank, the Telecom Act, and commodity-markets modernization all followed this pattern.
THE STRATEGIC CRYPTO RESERVE IS BUILT ON FOUR ECONOMIC LIES
It has now been three Congresses. It’s time for Congress to do its job, pass the CLARITY Act, and allow a powerful new technology to serve American consumers and businesses.
Americans are tired of lawmakers dodging responsibility and calling it politics.
Pat Toomey is the former ranking member of the Senate Banking Committee and an adviser to Coinbase and Paradigm. Patrick McHenry is the former chairman of the House Financial Services Committee and a senior adviser to Andreessen Horowitz.
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[ H/T Washington Examiner ]
