Solana Policy Institute Says U.S. CLARITY Act Faces Aug. 7 Turning Point, Full Rulebook May Take 10 Years

The CLARITY Act, a U.S. crypto market-structure bill, faces a critical test on Aug. 7, the Solana Policy Institute said. If the measure passes the Senate, the chances of it becoming law this year rise sharply. Even then, it could take as long as a decade for the detailed rules needed to fully implement it.

Miller Whitehouse-Levine, chief executive of the Solana Policy Institute, made the remarks on June 23 at a policy symposium held at Hashed Lounge in Seoul's Gangnam district titled “Policy Symposium Toward Korea as a Digital G2: The Future of Digital Assets and Capital Markets — Choices for the U.S. and Korea.” He said that if the Senate passes the CLARITY Act by Aug. 7, the bill would likely proceed to House approval and the president's signature.

In that case, the odds of enactment before year-end — potentially before the election — are 90% to 95%, he said. Aug. 7 is the Senate's last session day before its summer recess, making it the key date for the bill.

Whitehouse-Levine said the CLARITY Act is more than a bill to regulate crypto exchanges. He described it as a market-structure measure covering token issuance, spot-market oversight, real-world asset tokenization, or RWA, and decentralized-protocol regulation.

He said U.S. discussions on crypto market-structure legislation began with the 2018 Digital Commodity Exchange Act. At the time, the focus was on regulating spot markets for digital assets classified as commodities, including Bitcoin, Ether and Solana.

“In the U.S., commodity spot-market trading is not regulated at the federal level,” Whitehouse-Levine said. “The original starting point for market-structure legislation was to create a regulatory framework for exchanges and brokers such as Coinbase and Kraken, and for custodians such as Anchorage and Coinbase Custody.”

The discussion later expanded beyond exchanges and custodians to include token-issuance rules and ways to bring RWA into the U.S. regulatory framework. “The CLARITY Act is a bill aimed at creating a pathway to build public blockchains in the U.S. and permissionless protocols that run on them,” he said.

He also said the bill is not wholly favorable to the industry. “The CLARITY Act would allow projects to raise as much as $200 million over four years through new token issuance,” he said. “For some large projects, that cap could feel low.”

On decentralized protocols, Whitehouse-Levine said a different regulatory approach is needed than the one used for traditional financial institutions. If a protocol is sufficiently open, neutral and autonomous, there is less need to apply the same rules used for traditional exchanges such as the New York Stock Exchange or Nasdaq, he said.

He added that even if the CLARITY Act passes, writing the implementing rules will take considerable time. The bill largely sets broad direction, while specifics are left to rulemaking by federal agencies.

“The bill deals with market structure, disclosures, secondary trading and spot-market regulation, but the details will be filled in through about 40 separate rulemaking processes,” Whitehouse-Levine said. “Even if the bill passes this year, it could take about 10 years for all of the detailed rules to be completed.”

On the GENIUS Act, a stablecoin bill, he said the current market structure would likely remain largely intact. Issuers would conduct know-your-customer checks at the issuance stage, but tokens would still be freely transferable in the secondary market.

“Stablecoin issuers will likely need to monitor secondary-market transactions for sanctions compliance and related obligations, but they are unlikely to require KYC for every secondary-market trade,” he said. “The structure in which stablecoins move freely in the secondary market will likely continue.”

He also said uncertainty remains over dollar stablecoin issuers based outside the U.S., such as Tether. “The Federal Reserve and the Treasury have a strong sense of ownership over the dollar,” he said. “I don't think there will be much room for major dollar stablecoin issuers to remain outside the U.S.”