The Clarity Act faces a narrowing path to Senate passage before lawmakers leave for recess on Aug. 7, prompting analysts at Bernstein to conclude that federal agencies may become the main force shaping US cryptocurrency rules if Congress misses its window.
In a note led by analyst Gautam Chhugani, Bernstein said the coming week could determine whether the Senate advances the market-structure legislation in 2026. Galaxy Research reduced its estimated probability of the bill passing this year to 30% last month, reflecting the absence of an agreed legislative text despite ongoing negotiations.
A failure to pass the bill would leave token classification, exchange oversight and decentralized-finance rules to the Securities and Exchange Commission and Commodity Futures Trading Commission. That outcome could deliver faster guidance in some areas, though through agency actions that are more vulnerable to changes in administration, legal challenges and future rule revisions than a statute enacted by Congress.
Agencies could proceed under Project Crypto
Bernstein said regulatory work could continue under Project Crypto even without the Clarity Act. The initiative could lead the SEC and CFTC to issue interpretive releases explaining how different types of digital tokens should be treated under federal law.
Token taxonomy has become one of the industry’s most persistent unresolved questions. Projects, platforms and token holders have often had to assess whether an asset could be considered a security, a commodity or something outside either category using existing laws, enforcement cases and court decisions. Clearer agency guidance could reduce some of that uncertainty without waiting for a comprehensive act of Congress.
The analysts also identified decentralized finance and self-custody as potential targets for future rulemaking. DeFi refers to blockchain-based financial applications that use smart contracts rather than conventional intermediaries to carry out functions such as trading, lending or derivatives transactions. Self-custody allows users to control the private keys associated with their digital assets rather than leaving those assets with a third-party platform.
Bernstein’s note said agencies may also consider an “innovation exemption,” which could shield certain token issuances from securities treatment for a limited period. Such an approach would give qualifying projects room to launch and develop before facing the full requirements that apply to registered securities offerings. The scope, eligibility standards and legal durability of any exemption would determine whether it becomes a meaningful route for US-based token development or a narrow policy tool.
CFTC chair calls for federal standards
Michael Selig, chair of the Commodity Futures Trading Commission, made a similar case for agency action in a Fox Business interview last month. Selig said regulators would end up writing the rules if Congress does not act, while describing the current US approach as a patchwork of state laws and federal regulations.
His comments capture the practical pressure behind the Senate negotiations. Federal agencies can clarify elements of their own authority, but they cannot fully resolve jurisdictional boundaries that Congress has not settled. A market-structure law could set clearer lines between SEC and CFTC oversight, establish requirements for trading venues and provide a more consistent national framework than state-by-state licensing and enforcement.
The lack of agreed legislative language means companies developing tokens and blockchain networks must continue to plan around rules that are often determined through enforcement actions and litigation. Court rulings can clarify specific disputes, but they do not necessarily establish a complete framework for other projects with different structures, distribution models or governance systems.
That uncertainty particularly affects token issuers that need to decide whether to restrict US access, register with regulators, redesign their products or accept legal risk. It also affects DeFi applications and self-custody software, where policymakers have yet to establish durable standards that balance consumer protections with the decentralized nature of the technology.
Tokenization remains a policy focus
Bernstein said support for tokenization is likely to continue regardless of the Clarity Act’s immediate fate. Tokenization refers to representing financial or real-world assets, such as funds, bonds or other instruments, on a blockchain. The analysts also pointed to perpetual futures tied to tokenized real-world assets and prediction markets as areas likely to receive continuing policy attention.
These products raise questions that extend beyond token classification. Tokenized assets may involve securities, commodities, derivatives rules, custody requirements and rules governing the underlying asset. Perpetual futures, which do not have a fixed expiry date, can introduce additional derivatives oversight questions. Prediction markets have separately drawn scrutiny over whether their contracts should be regulated as event-based derivatives.
The Clarity Act was introduced in May last year by House Representatives French Hill and Glenn Thompson. Last week, Senators Thom Tillis and Ruben Gallego submitted a revised ethics compromise to the White House as lawmakers sought support before the Aug. 7 recess.
Whether that compromise can unlock a final agreement remains uncertain. If it does not, the immediate policy agenda would shift toward SEC and CFTC initiatives under Project Crypto, giving regulators greater influence over the first practical rules that cryptocurrency businesses encounter.
For deeper insight into evolving US crypto rules, explore how SEC/CFTC token taxonomy could reshape markets.
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