Banks can't afford to wait for Congress to pass the CLARITY Act

To the editor,

Maghnus Mareneck's recent American Banker op-ed (Crypto guidance is a step forward, but only Congress can finish the job, May 7) makes a fair point: Interpretive guidance on the regulatory treatment of digital assets is not statute, and the CLARITY Act would deliver something more durable than the guidance the SEC and CFTC put forward in March. That is true, but it's also beside the point for anyone trying to make a business decision today.

The joint guidance, combined with the OCC's parallel moves on custody and distributed ledger participation, has produced something that did not exist two years ago: a shared token taxonomy that both agencies recognize as the basis for how securities laws and the Commodity Exchange Act apply in practice. This is a structural shift, not a placeholder. For custodians and banks evaluating digital asset services, the classification framework now exists to determine which infrastructure path an asset should follow, which controls apply, and how regulatory treatment might change over time. That is enough to build on.

Banks are already doing exactly that. BNY Mellon, founded in 1784 and not historically known for getting ahead of its regulators, had a presence at Consensus Miami this year. State Street has been expanding its digital asset capabilities for years. JPMorgan's blockchain infrastructure, Kinexys, predates most of the regulatory clarity that now exists. These institutions did not wait for the GENIUS Act, and they are not waiting for CLARITY, they made a determination that workable conditions had arrived and moved accordingly.

This matters because the argument for waiting tends to treat legislative passage as a binary event after which participation becomes possible. But crypto-native custodians built the foundational infrastructure for this market (prime brokerage, settlement networks, custody platforms) under conditions far more ambiguous than anything an incumbent bank faces today. They never had a five-part taxonomy endorsed by both the SEC and CFTC. They never had OCC confirmation that custody and stablecoin activities were permissible without prior supervisory sign-off. They built anyway, and no bill signing will remove the head start that decision gave them.

Mareneck is right that the secondary market problem remains partially unresolved, and that CLARITY's explicit exemptions for qualifying digital commodity transactions would remove real residual risk that the guidance leaves in place. Statutory definitions would help. But the choice facing incumbent institutions is not between current guidance and the CLARITY Act. It is between acting on current guidance and falling further behind firms that have been operating in this space for years and will continue to do so regardless of what Congress does.

There are also ways the industry itself can help fill in the gaps. For example, more than 1,000 global member institutions of the OTC derivatives industry all operate under a standardized contract called the ISDA Master Agreement, but despite having an acronym like a government agency, ISDA is a private trade association. This demonstrates that just because the government hasn't created unified standards or laws for how the industry should operate does not mean the industry itself can't take the reins and develop its own standards.

The agencies have done what they can within existing law. That has been enough for some of the oldest and most deliberate institutions in American finance to commit resources and start building. While we can all agree legislation would be better, it's important to acknowledge waiting for it is a strategy with consequences of its own.