Crypto Bill Stalls, White House Won’t Wait: What’s Next for the SEC and CFTC?

White House and U.S. Treasury officials said the crypto market structure bill’s failure to advance in the Senate should not stop regulators from doing their work.

White House crypto adviser Patrick Witt and Luke Pettit, a U.S. Treasury official responsible for financial institutions, said Tuesday at the CoinDesk Policy & Regulation event in Washington that the focus had shifted from the legislative process in Congress to steps the administration and market regulators can take. The Clarity Act, which aims to set rules for the U.S. crypto market, failed to advance in the Senate last week.

Pettit said the bill had not been taken entirely off the table, but that the climate in Congress had cooled considerably for making progress. Both officials said whether an agreement can be reached during the year-end session between the November midterm elections and the new Congress taking office will depend on the election results.

SEC and CFTC to move forward using existing authority

Witt pointed to recent crypto work by the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Saying the agencies should not put their work on hold in the hope that the bill will pass by the end of the year, Witt said the administration would use the authority it already has.

This approach relies on the agencies pursuing rulemaking and exemptions within their respective jurisdictions even without new legislation from Congress. However, Witt acknowledged that these regulations could face legal challenges without the clear statutory basis the Clarity Act is expected to provide. The remarks do not mean that new authority has been granted to the SEC or CFTC or that any specific rule has taken effect.

Separate process for stablecoins continues

Although the Clarity Act, which addresses the broader structure of the crypto market, has stalled, rules implementing the GENIUS Act’s stablecoin provisions, which became law last year, are being prepared. Pettit said the U.S. Treasury and banking regulators were on track to meet the deadlines in the law.

Witt also drew attention to companies already marketing their products as “GENIUS-compliant stablecoins.” He said that because the final rules have not yet been issued, this compliance status does not yet exist; at the same time, he viewed companies’ efforts to prepare their policies and structures for the expected rules positively.

The White House adviser said that once the rules are finalized, a distinction will emerge between compliant and noncompliant stablecoins, and the market will make its choice. The expectation, Witt said, is that products operating within the regulatory framework could have an advantage.