Treasury Secretary pushes for crypto law to stop capital flight to Singapore and Abu Dhabi

Exchanges, token issuers, and institutional investors would gain legal clarity on their operations if the Digital Asset Market Clarity Act (CLARITY Act) passes. The bill would grant the CFTC primary regulatory authority over digital commodity spot markets, while keeping assets qualifying as investment contracts under SEC oversight. This framework would address the jurisdictional dispute between the SEC and the CFTC that has left many entities operating in a grey area and facing enforcement actions.

Treasury Secretary Scott Bessent has pushed the Senate to pass the bill before the 2026 midterms, arguing that the current regulatory ambiguity is pushing business and talent offshore to jurisdictions like Singapore and Abu Dhabi. He also noted that the lack of a defined regulatory perimeter leaves anti-money-laundering compliance weaker than it would be under a federal framework.

The bill has been stalled in the Senate for over 260 days due to disagreements over whether stablecoin issuers should be allowed to pay interest or yield to holders. Traditional banks have lobbied against this, fearing that yield-bearing stablecoins would accelerate deposit outflows from community banks. The American Bankers Association argues that unresolved yield loopholes could destabilize smaller regional institutions with thinner deposit bases.

A White House Council of Economic Advisers study found that stablecoin yields pose only a quantitatively small risk to traditional bank deposits. Despite this, Polymarket traders assign a 63-72% probability that the CLARITY Act is signed into law in 2026.