TLDR
- SEC Chairman Paul Atkins said the agency could issue rules for cryptocurrencies if the CLARITY Act stalls.
- Atkins said the SEC is providing technical support to lawmakers on cryptocurrency market rules.
- The CLARITY Act has passed the House and is still under review in the Senate.
- Senate priorities have slowed progress on the cryptocurrency bill ahead of the August recess.
- Polymarket’s odds of approving the CLARITY Act of 2026 have dropped to 35%.
SEC Chairman Paul Atkins said the agency is prepared to issue cryptocurrency market structure rules if Congress fails to pass the CLARITY Act, while Senate delays continue to narrow the bill’s 2026 window.
The SEC is preparing a backup plan for rulemaking
Atkins He said The SEC is helping lawmakers provide technical guidance as they review the digital asset market structure bill. Congressional action remains the preferred path because the law would give regulators clearer guidance, he said.
The head of the Securities and Exchange Commission said,
“We do everything we can to help them answer their questions and provide technical assistance. But at the end of the day, the law is the way to future-proof something.”
Atkins also said the agency could act under its rulemaking powers if the bill doesn’t pass. He added: “We are ready, willing and able to come up with rules that clearly address the same issues in other aspects of the cryptocurrency market.”
The comments were as follows: The law of clarity confronts Progress slows in the Senate. The bill has already been approved in the House of Representatives, while Senate committees have reviewed the market structure language covering cryptocurrency exchanges, brokers, tokens, and oversight roles.
Senate delay puts Clarity Act timeline under pressure
Senate leaders have turned attention to the Russian sanctions package and presidential candidates. This schedule leaves less time for cryptocurrency legislation before the August recess.
The delay has dampened expectations of quick passage. Polymarket traders cut the odds of the CLARITY Act becoming law in 2026 to 35%, down from February’s peak of 82%.
Cryptocurrency markets also responded to the slower schedule. Bitcoin fell to the bottom $65,000, while Ethereum fell nearly 4% as traders reduced their exposure during the July 28 market pullback.
Supporters say the bill should be introduced before summer recess begins on Aug. 7. The upcoming midterm election cycle may make bipartisan cryptocurrency legislation more difficult later in the year.
Senator Cynthia Lummis recently released a combined draft that combines the work of the banking and agriculture committees. The Banking Committee advanced the bill in May by voting 15 to 9.
Republicans will still need enough Democratic support to pass procedural hurdles. If Senate Majority Leader John Thune files a repeal, supporters may need about 10 Democratic votes to overcome a filibuster.
The moral dispute remains a major point of contention
The main dispute concerns the ethical rules associated with digital asset activity by senior government officials. The current draft would prevent the president and other senior officials from issuing digital assets for profit.
Some Senate Democrats say the language is not enough. They want stronger limits covering immediate family members and other conflict of interest concerns associated with cryptocurrency projects.
New York Attorney General Letitia James also raised concerns about state-level authority. She warned that the current bill could weaken the state’s investor protection laws and limit fraud enforcement powers.
Atkins said the SEC still favors the legislation because the law could give the agency a permanent framework. He said,
“But ultimately, we need certainty about a fundamental law that helps future-proof so that we have a clear direction to strive for.”
If Congress misses the 2026 opportunity, Establish encryption rules It may turn back towards regulators. The SEC and CFTC could move forward with rules covering trading venues, token classifications, custody, disclosures, and market supervision.
Regulatory attention will also turn to the GENIUS Act, which effectively gives policymakers another path to stablecoin regulations. The Clarity Act remains a broader market structure bill, but timing and ethics negotiations in the Senate will now decide whether a final vote will be reached this year.
