Crypto’s US rulebook faces a reset as Senate dealmakers prepare to leave

Two senators who helped move a sweeping US crypto bill forward are retiring, threatening to leave its next push without key dealmakers. That is the warning from Cato Institute researcher Ryan Chan-Wei in a CoinDesk opinion column, which argues that years of work on a federal crypto rulebook could lose momentum just as the industry appeared close to securing one.

According to the column, the Senate failed to advance the 635-page Digital Asset Market Clarity Act. Chan-Wei sees no realistic route to reviving it before year-end with midterm elections approaching. His assessment points to a challenge beyond gathering enough votes: the next Congress would inherit the unfinished legislation without two senators who helped bring competing interests together.

Cynthia Lummis, the Wyoming Republican who chairs the Senate Banking Committee’s digital-assets subcommittee, is retiring. So is Thom Tillis, the North Carolina Republican who helped negotiate a bipartisan compromise over stablecoin rewards—benefits offered to holders of those digital tokens. Chan-Wei credits that agreement with helping the bill move out of committee, an earlier stage in the legislative process.

A rulebook with capital at stake

The Clarity Act sought to define crypto market structure: the legal rules governing tokens, trading firms and their supervisors. It would establish categories for digital assets, provide a licensing framework for businesses trading them and divide oversight responsibilities between the Securities and Exchange Commission and the Commodity Futures Trading Commission. Those boundaries matter to firms deciding how to operate in the market.

Chan-Wei, a research fellow at Cato’s Center for Monetary and Financial Alternatives, argues that unclear rules discourage regulated institutions from committing capital. He also says incomplete oversight gives ordinary Americans little reason to trust the market. In his view, a legal framework could help crypto deliver broader access to finance and cheaper cross-border payments. These are potential benefits identified by the author, not outcomes established by the bill’s progress.

Chan-Wei’s assessment: the new Congress will effectively have to start again as leading Senate supporters depart.

The effort has a long history. The column traces attempts at comprehensive crypto legislation to the Token Taxonomy Act of 2018 and says proposals across four Congresses have fallen short. The Clarity Act came closest, Chan-Wei writes, attracting support from both crypto businesses and established financial firms, including Goldman Sachs and BlackRock. He argues that the central market-structure questions had largely been settled.

Ethics became the dividing line

What stopped the bill, in Chan-Wei’s account, was concern about ethics and potential conflicts of interest at the highest levels of government. He acknowledges that perceptions of corruption and self-dealing can damage public trust in crypto. But he argues that lawmakers should not have allowed those concerns to derail the market rulebook, because other legislative routes for addressing ethics would have remained available.

The next test is whether a new Congress can rebuild support and finish the framework. Chan-Wei points to the European Union, the United Kingdom, Japan and Singapore as jurisdictions that have already established regulatory boundaries for crypto. For the United States, the challenge he identifies is turning years of negotiations into law while replacing the lawmakers who helped hold the compromise together.