The cryptocurrency market can continue to grow without new federal legislation, but the absence of a comprehensive rulebook risks pushing the next wave of investment and financial infrastructure outside the United States, according to a new analysis from Grayscale Head of Research Zach Pandl.
The warning comes as the Senate prepares for a critical procedural vote on the Digital Asset Market Clarity Act, or CLARITY Act, on September 15. Majority Leader John Thune filed cloture on the motion to proceed to H.R. 3633, setting up a test of whether the bill has enough support to overcome a Democratic filibuster. The vote is not a final decision on the legislation itself but will signal whether a viable path forward exists after months of stalled negotiations.
Pandl argues that decentralized networks like Bitcoin do not depend on Congress for their survival. Bitcoin can continue producing blocks, processing transactions, and serving as a store of value regardless of the Senate calendar. Stablecoin payments can keep expanding. The core functions of crypto, he says, have moved forward for nearly 17 years without a federal market-structure law.
The risk lies elsewhere. Exchanges, institutional intermediaries, and tokenized financial products operate under a different set of constraints. They need licenses, banking relationships, regulatory approvals, and the confidence to commit large amounts of capital to a specific jurisdiction. Without statutory clarity, those businesses may choose to build in markets that have already established predictable rules.
"Crypto will move forward without CLARITY," Pandl wrote, aided by expected regulatory action from agencies like the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). But he described the bill's stalled progress as "a missed opportunity" and warned that friendlier token issuance rules and developer protections in other countries could draw activity overseas.
The legislative push collides with President Donald Trump's ambition to make the United States the global center for digital assets. Trump has repeatedly framed crypto as an international competition, arguing that America should lead rather than cede ground to rival economies. Other governments are not waiting. Russia recently signed a domestic crypto-market framework covering regulated exchanges and digital depositories, and while its model is more restrictive than the CLARITY Act, it demonstrates that competing jurisdictions can keep advancing their own rules while Washington debates.
The CLARITY Act would establish the first federal rulebook for digital assets by defining when tokens are classified as securities versus commodities and clarifying the regulatory jurisdictions of the SEC and CFTC. The bill passed the House earlier this year but has faced a difficult path in the Senate, where Republicans hold a slim majority and need at least eight Democratic votes to reach the 60-vote threshold required to break a filibuster.
Election-year politics have added further friction. With the November midterms approaching, lawmakers face competing demands on their time and attention. The Senate calendar leaves a narrow window for action, and Pandl said the realities of that calendar remain a key obstacle. He described passage this year as "technically still possible" but acknowledged the odds appear low.
Regulators can cover part of the gap. Pandl pointed to progress in institutional custody, banking access, and staking policy under existing authority. The SEC has already used its interpretive guidance to clarify how federal securities laws apply to different crypto assets and transactions. Further rulemaking is expected around tokenized securities. Those steps can remove uncertainty without a new act of Congress.
The limitation is durability. Agency interpretations can be revised under a new administration, challenged in court, or constrained by the statutes regulators are interpreting. A market-structure law places core rules in federal statute, giving companies a stronger basis for planning across political cycles. That difference can influence where a trading platform is established, where a tokenized product launches, or where an institution decides to deploy capital.
