The US crypto industry has launched a concerted push for Congress to pass a federal market structure law known as the Digital Asset Market Clarity Act of 2025 (HR 3633). Industry advocates view the legislation as the necessary “missing layer” of federal law for the industry to thrive. While the “GENIUS Act” set ground rules for payment stablecoins last year, the Clarity Act aims to establish the overarching market structure for secondary trading, asset classification, and intermediary registration.
Without them, major players argue, the U.S. market will remain trapped in a patchwork of government licensing and enforcement-oriented policies. Nevertheless, the path to a deal remains fraught with complex technical hurdles. According to Alex Thorn, head of research at Galaxy Research, a cross-party meeting was held on January 6th, highlighting a stark divide between a Republican push for speed and a new set of Democratic demands that could fundamentally change the impact of legislation on token issuance and software development.
The Problems Hampering the Clarity Act
The immediate focus, in particular, is the Senate calendar. Republicans are pushing for an amendment to the bill by the Senate Banking Committee as early as next Thursday, January 15th. This aggressive timeline is intended to establish a framework before the legislative window narrows later in the year. But Thorn’s analysis of Wednesday’s bipartisan talks suggests it remains unclear whether the two sides can close significant policy gaps in time to create a framework that can pass both chambers.
The primary point of friction has emerged around the treatment of decentralized finance (DeFi). According to Thorn, Democrats have made a number of strong demands to bring the DeFi sector under the umbrella of traditional financial oversight. Among their key demands are requiring compliance with “front-end sanctions” for DeFi interfaces, a requirement that would force developers to verify users at the point of access, and granting expanded powers to Treasury Department “special measures” to oversee the sector.
The Battle for Stablecoin Yield
While the debate over DeFi is largely ideological and technical, the battle for stablecoin yield has become an uphill battle for bank revenues. The bipartisan talks made clear that the regulatory treatment of stablecoin rewards, a key revenue driver for the crypto sector, remains an unresolved structural issue that requires extensive discussions before a premium is feasible. U.S. banks have aggressively lobbied against allowing stablecoin issuers to pass on earnings from foreign reserves (e.g., Treasury bills) to holders.
However, crypto firms have pushed back, calling the banking lobby’s stance protectionism rather than caution. Coinbase Chief Policy Officer Faryar Shirzad argued that Congress effectively resolved the stablecoin issue with the GENIUS Act and that reopening the yield debate now creates unnecessary uncertainty that threatens the future of the U.S. dollar as on-chain trading shifts. Shirzad framed the dispute in stark financial terms, pointing to data that suggests U.S. banks make about $176 billion a year on the roughly $3 trillion they park at the Federal Reserve.
Institutional Ambitions
The urgency of crypto lobby groups rests on the basic assumption that these legislative knots will unravel into bank-level standards that favor incumbents. For large U.S. crypto firms, the Clarity Act is less about avoiding lawsuits and more about unlocking institutional business models currently blocked by regulatory opacity. Reece Merrick, a senior executive at Ripple, highlighted this operational bottleneck.
He explained that “The US still lacks comprehensive regulatory clarity for the broader crypto ecosystem, which continues to prevent US-based companies from fully thriving and innovating in this space.” He noted that his company is “actively advocating for better, more thoughtful frameworks to level the playing field and drive the next phase of growth,” and expressed optimism that the Clarity Act could provide that certainty in the near future.
Global Pressure
As the Senate debates markup data and sanctions wording, the broader argument for passing the bill is shifting from crypto-specific sentiment to harsh fiscal realities and global competition. Domestically, advocates are increasingly linking the structure of the crypto market to the health of government finances. Research from the Brookings Institution has linked stablecoin growth to demand for short-term government bonds, creating a non-bank buyer base for US debt.
Internationally, the costs of delay are being felt as global competitors move into execution mode. By comparison, the European Crypto Asset Markets (MiCA) are already setting a benchmark for licensing in the single market, with the European Securities and Markets Authority (ESMA) publishing detailed implementation templates that provide companies with a clear compliance roadmap. Senator Cynthia Lummis, a vocal supporter of the law, highlighted this jurisdictional arbitrage as a key reason for the Jan. 15 push.
For more information on the Digital Asset Market Clarity Act of 2025, visit https://cryptoslate.com/heres-why-crypto-firms-wants-us-congress-to-pass-the-clarity-act/
