Despite growing bipartisan support for crypto regulation, the much-anticipated Digital Asset Market CLARITY Act hit another roadblock when the Senate Banking Committee delayed its markup on January 14, 2026. The delay came after Coinbase CEO Brian Armstrong and other industry heavyweights pulled their support. Apparently, they decided a flawed bill is worse than no bill at all. Pretty bold move.
The CLARITY Act aims to divide regulatory authority between the SEC and CFTC, classifying digital tokens by function rather than continuing the regulation-by-enforcement approach that’s driven everyone crazy. It defines critical terms like “blockchain system” and “digital commodity” while prohibiting companies from dodging regulations through intellectual property transfers. Nice try, folks.
The SEC-CFTC power split sounds great until you read the fine print. Devil’s in the details, as usual.
One major sticking point? Stablecoins. Banking interests are freaking out about yield-bearing stablecoins potentially causing deposit flight from traditional banks. The potential for reduced bank credit to the real economy has become a serious concern for financial regulators. Meanwhile, crypto firms argue that restrictions on these products limit innovation. Classic turf war.
The bill also raises eyebrows with provisions that might subject non-custodial developers to compliance requirements meant for centralized actors. It excludes activities like mining and staking but creates new definitions for “digital commodity related persons” that have some developers nervous. Really nervous.
Industry players have demonstrated surprising political muscle by derailing the markup simply by withdrawing support. This legislative delay highlights the regulatory paradox where stakeholders broadly agree on the need for clear rules but consistently fail to agree on specifics. Some advocacy groups still want to move forward, but Armstrong’s statement that the current form is “worse than no bill” clearly hit home.
The Senate Agriculture Committee is still scheduled to advance CFTC portions on January 27, despite the Banking Committee delay. The White House keeps emphasizing urgency, but lawmakers are stuck between alienating the industry or accepting continued regulatory uncertainty.
If passed, this framework could shape crypto regulation for years. But right now? It’s just another example of how Washington struggles to understand technology that moves faster than legislation. Shocking, right?
