Written by: Cleve Mesidor
Compiled by Chopper, Foresight News
This year’s intense debate over the Digital Asset Market Structure Act (CLARITY Act) was never intended to completely reject the bill. The essence of this legislative struggle is who gets to draft it.
Even Senator Elizabeth Warren, regarded by the industry as one of cryptocurrency’s biggest opponents, wants to be involved in shaping the rules. In fact, since the Senate version of the bill was defeated in January, the list of groups seeking to participate in drafting the legislation has continued to grow.
On December 11, 2025, Wells Fargo President and CEO Charles Scharf (right) departs after meeting with members of the Senate Banking Committee at the U.S. Capitol Visitor Center.
Coinbase CEO Brian Armstrong stated in a recent social media post: “In January, I opposed sending the draft bill to committee because it had significant outstanding issues regarding decentralized finance (DeFi), tokenization, the CFTC’s jurisdiction, and stablecoin yields. At the time, the draft had serious flaws that would harm the crypto industry; support was fragmented, and the bill had no chance of passing. We worked with multiple parties to revise the bill to make it viable. In the revised version submitted to committee about four months later, all four issues I raised were addressed. I’m proud of this work, and if I had to do it again, I would—because it led to a better bill. This is just one step in a long process.”
Ironically, the response from numerous stakeholders to Armstrong’s January move was largely, “We want to be involved in the revision.” One institution after another emerged, claiming they wanted to help “improve” the bill.
Multiple parties' demands conflict with each other
Banks were the first to oppose the changes championed by Armstrong, which subsequently led the White House to host several small summits inviting cryptocurrency companies and bank executives.
Subsequently, law enforcement agencies raised objections, expressing concerns about developer protection provisions and illegal financial risks.
Disclosure documents filed in June revealed that President Trump held $1.4 billion in cryptocurrency assets, fueling bipartisan calls for ethical provisions in the bill.
Regulatory experts have also repeatedly warned that both the Commodity Futures Trading Commission (CFTC) and the U.S. Securities and Exchange Commission (SEC) are facing vacancies on their boards.
The political tug-of-war between the legislative and executive branches over cryptocurrency legislation is also affecting the overall perception of this emerging industry.
Even so, bipartisan members of the Senate Banking Committee and the Agriculture Committee continue negotiations to find a compromise and move the measure forward.
On July 16, 2025, Blockchain Association CEO Summer Mersinger (center) testified before the House Ways and Means Oversight Subcommittee hearing titled “Becoming the Global Crypto Capital: Building a Digital Assets Policy for the 21st Century,” held in the Longworth Building.
What happens next?
Nearly two weeks have passed since the final vote on the CLARITY Act failed, the wounds are still fresh, policy advocates on opposing sides are still reviewing the events, and all claim their goal is to improve the CLARITY Act.
Some are turning their attention to the lame-duck session of Congress following the midterm elections, hoping to revive the bill. Others are placing their hopes on financial regulators to directly issue detailed guidelines to fill the regulatory gap. Still others believe the bill has already been completely dead.
However, most stakeholders have already privately developed plans for the next Congress. Regardless of whether the Democrats regain control of the House or secure majorities in both chambers, various external factions will need stronger bipartisan strategies and approaches.
The Bank Policy Institute (BPI) clearly stated in its statement on the conclusion of the CLARITY Act vote that its member institutions will not give up on this effort: “The U.S. banking industry continues to support the establishment of a robust, long-term regulatory framework for digital assets that will secure America’s global leadership for decades to come. We believe Congress can achieve this goal while safeguarding the banking credit functions that underpin economic growth. As lawmakers consider next steps, we recommend targeted adjustments to policies governing stablecoin yields. We are ready to collaborate with all stakeholders to accomplish this vital objective.”
The cryptocurrency industry association also stated that it will continue to move forward. Last Friday, Summer Mersinger, CEO of the Blockchain Association, announced her upcoming departure, with the association’s founding leader, Kristin Smith, returning as interim CEO. After the vote, Summer Mersinger said: “The work to deliver long-awaited consumer protections and clear regulatory guidelines for American digital asset users and entrepreneurs is far from over. Tens of millions of Americans hold digital assets, yet U.S. builders still lack clear federal regulations—while Europe, the UK, Singapore, the UAE, and Japan have already established their own regulatory frameworks... We will not stop until the U.S. industry has clear regulatory rules.”
On December 11, 2025, Senator Raphael Warnock (D-GA, left) and Senator Thom Tillis (R-NC) met briefly and shook hands en route to a meeting with bank executives at the Capitol Visitor Center.
Key Republican negotiator withdraws
Unfortunately, key officials who have played a crucial bridging role in cryptocurrency policy and regulatory debates over the past decade are about to leave Washington.
North Carolina Senator Thom Tillis will not seek a third term and will step down at the end of the year. He negotiated a revenue-related compromise with Maryland Democratic Senator Angela Alsobrooks and collaborated with Arizona Senator Ruben Gallego to advocate for stronger bipartisan ethics provisions in the White House.
Wyoming Senator Cynthia Lummis has chosen not to run for another six-year term, stating she will return to her ranch. As chair of the Senate Banking Committee’s Subcommittee on Digital Assets, she led the legislative effort for the CLARITY Act. Known for her bipartisan collaboration, she worked alongside Senator Kirsten Gillibrand of New York to advance the GENIUS Act. Her departure will be difficult to fill.
The core regulatory body corresponding to the CLARITY Act is also facing staffing vacancies. Hester Peirce, a two-term SEC commissioner, will complete her term this Friday and return to academia. Since 2018, she has been one of the most influential figures in cryptocurrency regulation. Before her departure on October 2, Peirce posted on X last week: “One of the regulatory agency’s delicate yet vital tasks is to maximize the freedom of individuals to make the best choices for themselves and their families within a reasonable regulatory framework, giving people confidence to engage in transactions. As I depart, I am confident that under the outstanding leadership of Chairman Paul Atkins and Commissioner Mark Uyeda, the SEC’s excellent team will continue to maintain this balance.”
When Washington resumes legislative discussions to establish long-term policies that drive innovation and safeguard U.S. competitiveness, the departures of Peirce, Lummis, and Tillis will have a significant impact.
The Next Congress and Cryptocurrency Legislation
The new and incumbent members of the 120th Congress must collaborate with cryptocurrency industry associations, banking lobbying groups, law enforcement agencies, regulatory bodies, and other stakeholders seeking to refine the framework for digital asset markets if any legislation is to reach the President’s desk and proceed to the complex rulemaking process. Given that Congress has never passed a bill satisfying all parties, these goals are undoubtedly ambitious. Bipartisan compromise bills are most likely to survive the legislative process.
It is reasonable to believe that institutions with strong connections in both political parties will be well-positioned to assist the next Congress in drafting a new version of the CLARITY Act.