Federal Reserve Governor Christopher Waller has delivered a sobering assessment of the U.S. cryptocurrency regulatory landscape, stating that efforts to pass comprehensive market structure legislation have reached a critical stalemate in Congress. This declaration throws the future of the long-awaited Crypto-Asset Market Structure bill, known as the CLARITY Act, into significant uncertainty.
Waller pinpointed deep-seated political and institutional disagreements as the primary roadblocks. The core issue revolves around determining which federal agency—the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC)—holds primary authority over most digital assets. This jurisdictional ambiguity has created a contentious and challenging environment for businesses. Waller also noted that the initial market euphoria following Donald Trump's re-election has begun to wane, further complicating the political momentum for the bill.
The legislative impasse has direct consequences. Cryptocurrency exchanges and service providers face increased compliance costs and legal risks operating under a patchwork of state regulations and evolving federal enforcement actions. This uncertainty stifles investment and innovation, potentially driving capital to jurisdictions with clearer rules like the European Union under its MiCA regulation. The delay also impacts stablecoin oversight and integration with traditional banking.
This stalemate follows a period of regulatory progress, including the passage of the Genius Act in the summer, which established a framework for dollar-backed stablecoins. However, market structure regulations have proven more complex, partly due to banking lobby objections to provisions allowing stablecoin holders to receive interest-like returns. With the 2025 legislative window narrowing due to the upcoming election cycle, experts suggest breaking the comprehensive bill into smaller, more manageable pieces, starting with areas of broader agreement like stablecoin rules.
