The Clarity Act, a comprehensive regulatory framework for the U.S. crypto market, failed to clear the Senate, but efforts to build a legal framework for digital assets are continuing. After the Securities and Exchange Commission opened a path for trading tokenized stocks, the House of Representatives advanced bills on crypto taxation and a strategic bitcoin reserve. With comprehensive legislation stalled, regulatory action by financial authorities and issue-by-issue legislation are moving forward at the same time.
International wire services reported on the 19th that a series of significant crypto-related measures were announced in the United States within two days after the Clarity Act was blocked in a Senate procedural vote. The SEC moved first. On the 17th, the commission announced an "Innovation Exemption" that allows tokenized U.S.-listed stocks to be traded on blockchains. The measure temporarily excludes tokenized securities venues (TSVs) meeting certain requirements from the definition of an exchange under securities law and waives dealer registration requirements for some liquidity providers. The exemption runs for five years.
SEC Chairman Paul Atkins cited the Senate's failure to pass the Clarity Act as the background for the move. Saying Congress had failed to advance the Clarity Act earlier in the week, Atkins said the SEC would act within its legal authority to promote on-chain trading in U.S. capital markets. Rather than wait for Congress to reach a conclusion, the agency drew on existing exemptive authority under securities law.
In Congress, narrower bills gained momentum. The House Ways and Means Committee approved the Digital Asset Tax Clarity Act on the 16th by a vote of 38 to 5. The bill centers on overhauling crypto tax rules, including clarifying the tax treatment of mining and staking and reducing reporting burdens.
After the vote, House Ways and Means Committee Chairman Jason Smith said the bill would provide tax certainty for Americans who own and trade cryptocurrencies and lower compliance burdens. The message was that lawmakers would fix the tax rules the market needs now, regardless of whether the Clarity Act passes.
Efforts to write a strategic bitcoin reserve into law also advanced a step. The House Financial Services Committee approved the American Reserve Modernization Act of 2026 the same day. The bill would require the Treasury Department to maintain a "strategic bitcoin reserve" and a separate "digital asset reserve." Bitcoin placed in the strategic reserve would have to be held for at least 20 years. During that period, it could not be sold, exchanged, auctioned or pledged as collateral. The aim is to give statutory backing to a strategic bitcoin reserve created under an executive order.
The Commodity Futures Trading Commission joined the market-friendly shift on the 17th. It issued a no-action position stating that it would not bring enforcement action against "passive software providers" that supply or promote software supporting customer trading, provided certain conditions are met. The step is not specific to crypto, but it has drawn attention because it touches on access to financial markets through software such as wallets.
The Clarity Act won 49 votes in favor and 50 against in a Senate cloture vote on the 15th, falling short of the 60 votes needed to advance.
Global financial firms are focusing on the roles of the SEC and the CFTC following the Clarity Act's failure. JPMorgan said the bill was not entirely dead but that the window for passage this year had become extremely narrow. As a result, it expects the attention of investors and the crypto market to shift to the SEC and the CFTC.
Still, some argue that targeted regulatory action cannot fully substitute for comprehensive legislation, because current SEC and CFTC rules could be reversed at any time by a change in policy direction or the outcome of litigation. Atkins also stressed that sustainable rulemaking must follow these interim measures.
