Senate May Deadline Sets Final Window for U.S. Crypto Federalization

Institutional capital will enter the U.S. crypto market and anchor development in the country for the first time in nearly a decade if the CLARITY Act becomes law. This would reduce regulatory risk for firms and investors by ending a patchwork of enforcement actions. Jurisdiction would be split between the SEC and the SEC and the CFTC based on asset type and platform function, with defined registration pathways for intermediaries and trading platforms. Disclosure rules, custody standards, and investor protections would apply across the board. The SEC's Project Crypto, launched in 2025, would execute this transition through updated token taxonomy and application of the Howey test. Treasury Secretary Scott Bessent has warned that delays sacrifice U.S. competitiveness and encourage offshoring. The House has already passed the act, and the Senate Banking Committee is scheduled to hold a markup in the second half of April. The Senate must pass the legislation by May to avoid pushing consideration of the act into the period following the November 2026 midterm elections.