America’s crypto rulebook is being written by regulators and exchanges, not by Congress
On September 16th the Senate declined to invoke cloture on the CLARITY Act, the bill meant to divide oversight of digital assets between the SEC and the CFTC. Prediction markets had given it roughly a 15% chance, so the failure surprised few. The sticking point was not market structure but politics: how far officials should be required to divest personal interests in crypto ventures. With the midterms imminent, the bill is not dead so much as parked.
Anyone concluding that American crypto policy has therefore stalled had a busy week ahead of them.
The day after the Senate vote, the SEC granted a five-year “innovation exemption” allowing tokenised securities venues to trade tokenised shares using permissioned automated market-makers and liquidity pools, relieving them of the obligation to register as exchanges. The relief is hedged with volume caps, auditable smart contracts and issuer notification. The important detail is legal rather than technical: tokenised shares must carry the same voting and dividend rights as ordinary ones. That distinguishes them from the synthetic exposure offshore platforms have offered for years, and gives the instruments somewhere respectable to trade.
The incumbents were not waiting for the statute either. Nasdaq put $100m into Payward, the parent of Kraken, to work together on tokenised equity trading, settlement and surveillance. The NYSE and the London Stock Exchange Group are pursuing their own approaches. The prize is distribution: tokenised stocks are worth about $3bn in total, a rounding error beside conventional equity markets, but the exchange that controls how tokenised shares reach investors will be well placed if that figure ever becomes serious.
Banks, meanwhile, are laying track. Deutsche Bank is preparing custody for institutional clients covering bitcoin, ether and selected stablecoins, as a step towards a tokenised platform; UniCredit is choosing vendors for custody and brokerage. More revealing was a settlement experiment in which DBS and Citi moved money across two different banking ledgers, using SWIFT’s digital-ledger service as a coordination layer. The industry has spent a decade arguing about whose blockchain should win. The answer emerging is that none of them needs to.
The same pragmatism is visible in tokenised money. Visa is connecting card-settlement data to on-chain credit markets, so that fintechs can draw working capital from decentralised liquidity pools. In Europe, the 37-bank Qivalis consortium has chosen Ethereum for a euro stablecoin backed one-for-one, due in the second half of 2026 under a Dutch e-money licence. And BlackRock won approval for a Hong Kong-domiciled money-market fund denominated in Hong Kong dollars, with Standard Chartered as trustee and custodian, accepting subscriptions in cash, stablecoins or tokenised deposits. Yield-bearing digital cash, until now overwhelmingly a dollar business, is acquiring other currencies.
All of which leaves an awkward asymmetry. Rules made by agencies can be unmade by agencies. An exemption granted for five years is an invitation to build infrastructure whose legal basis expires in 2031, most likely under a different administration and possibly a different SEC chairman. Polymarket puts the odds of Democratic control of both chambers after the midterms at 57%, and plenty of Democrats support a market-structure law; several who favoured moving CLARITY forward voted against it on Tuesday, and three Republicans objected on substance. A better bill is plausible. A quick one is not.
For now, the rulebook is being drafted in exemptions, term sheets and settlement pilots. The question for the next Congress is whether the law arrives before the exemption runs out, or merely ratifies whatever the market has built in the meantime.
