The Senate’s failure to advance the Clarity Act has placed the next phase of U.S. crypto rulemaking largely in the hands of the Securities and Exchange Commission and Commodity Futures Trading Commission, with Bernstein expecting both agencies to move rapidly on targeted regulations after congressional negotiations collapsed.
A procedural vote on Tuesday ended 49–50, leaving supporters 11 votes short of the 60 needed to move the measure forward. Talks broke down over ethics provisions connected to President Donald Trump’s crypto interests, halting legislation designed to provide a clearer federal framework for digital-asset market structure.
Bernstein analysts led by Gautam Chhugani said the setback is likely to shift policymaking from Capitol Hill to the two principal federal market regulators. Rather than waiting for another legislative opening, the firm expects the SEC and CFTC to pursue rules within their existing authorities, describing the likely pace as “aggressive and swift.”
Agencies face pressure to define market boundaries
The immediate regulatory agenda could cover questions Congress had hoped to settle through statute: which digital assets should be treated as securities or commodities, how decentralized-finance protocols and self-custody tools should be handled, and which rules should govern tokenized shares.
Token classification remains central to the SEC-CFTC divide. The SEC generally oversees securities markets, while the CFTC regulates commodities and derivatives. Crypto projects and trading venues have faced years of uncertainty where a token’s regulatory treatment can depend on its issuance, marketing, governance structure, and the rights it gives holders.
Agency rules could offer more detailed tests and registration pathways than enforcement cases alone. Yet regulation issued through existing authority would remain vulnerable to legal challenges and could be revised by future administrations, giving it a different level of permanence from legislation passed by Congress.
Bernstein also expects regulators to examine equity tokenization, which refers to blockchain-based representations of conventional financial instruments such as shares. The area raises practical questions over shareholder rights, settlement, broker-dealer obligations, custody, and whether tokenized shares should trade under securities-market rules even when the underlying technology differs from traditional infrastructure.
The firm identified real-world-asset perpetual futures as another area where approvals could arrive more quickly. Perpetual futures are derivatives without an expiry date and are common in offshore crypto markets. Applying that structure to tokenized real-world assets would require regulators to address pricing, market surveillance, collateral, and the relationship between the derivatives contract and the asset it references.
Bernstein also pointed to possible SEC-CFTC coordination on single-stock perpetuals. Such products would test the boundary between securities regulation and derivatives oversight, particularly when contracts track the price of individual public companies rather than cryptocurrency.
Sports contracts may also face new treatment
Federal oversight of sports-event contracts could become part of the agencies’ post-legislative agenda. Bernstein expects potential updates to the rules determining whether those contracts should be treated as swaps.
The issue has practical consequences for event-contract platforms offering markets tied to sporting outcomes. A swap classification could place a product under a more restrictive regulatory framework, affecting how it is listed, cleared, marketed, and accessed by retail users. The CFTC has already faced pressure to clarify the status of event-based contracts that resemble betting products but are offered through federally regulated derivatives structures.
Without a congressional market-structure statute, these decisions will be shaped through rule proposals, interpretive guidance, product reviews, and potential litigation. That process can move faster than a Senate bill, but it is also likely to produce narrower, product-specific outcomes rather than a single comprehensive framework.
Stablecoin rewards remain unresolved in practice
The failed bill also leaves the current approach to stablecoin rewards unchanged, according to Bernstein. The compromise text would have barred rewards paid on idle stablecoin balances while allowing benefits linked to customer activity.
As the legislation stands stalled, programs that reward users for simply holding stablecoins may continue unless restricted under another applicable rule or statute. Bernstein said stablecoins remain governed by the GENIUS framework, while the precise limits on issuer-funded rewards could become a major point of regulatory interpretation.
StoneX Financial, in a separate note led by Mark Palmer, said it considers the Clarity Act effectively finished for this Congress. The firm cited 14 Senate working days remaining before campaign activity takes precedence and pointed to Senator Cynthia Lummis’s view that the next realistic legislative attempt may not arrive until 2030.
StoneX said Polymarket odds of the bill becoming law in 2026 had fallen to 16% before the vote, from 82% in February. Prediction-market prices are not forecasts in the conventional sense, but the decline reflected rapidly fading expectations that Congress would settle the issue this year.
Banking rules could become the next battleground
StoneX said proposed rules from the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation could treat a GENIUS Act issuer’s yield prohibition as breached if the issuer pays an affiliate that subsequently rewards stablecoin holders.
That question reaches beyond a straightforward interest payment. Stablecoin companies, payment platforms, wallets, and affiliated businesses may structure rewards through partnerships, rebates, or other incentives. If banking regulators interpret such arrangements as indirect yield, firms could need to alter programs that have become a major competitive tool in the stablecoin market.
StoneX expects the issue could ultimately reach court after the GENIUS framework takes effect in January 2027. Litigation would add another layer of uncertainty, particularly if the OCC, FDIC, SEC, and CFTC take different views of similar products.
The Senate vote therefore leaves U.S. crypto firms facing a more fragmented policy path: agencies can clarify parts of the market sooner, but they will do so through separate mandates and rules. The most immediate developments are likely to come from proposed SEC, CFTC, OCC, and FDIC actions, rather than a renewed attempt to pass the Clarity Act.
For deeper context on stalled legislation and next steps for stablecoins, read this analysis of future U.S. crypto regulation.
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