US CLARITY Act Stalled, Tokenized Stocks Approved, Strategic Bitcoin Reserves to be Formally Written into Law
The US Congress's CLARITY Act (cryptocurrency market structure legislation) failed to advance in the Senate this week, but the SEC immediately announced new rules for an "innovation exemption," opening a compliant pathway for tokenized stocks. In the same week, the House Financial Services Committee also voted to advance a bill to formally write the strategic Bitcoin reserve established by the Trump administration into law.
The CLARITY Act was originally intended to clarify the regulatory division of responsibilities between the SEC and CFTC for crypto assets, but it faced obstacles in the Senate this week and did not progress as scheduled. Subsequently, on September 17, the SEC announced the launch of an "innovation exemption" mechanism lasting up to five years, allowing compliant trading platforms (referred to as "Tokenized Securities Venues" or TSV) to operate market-making and liquidity pool businesses for tokenized US stocks without registering as national exchanges.
This exemption requires that tokenized stocks must come with full shareholder rights (dividends, voting rights), explicitly excluding "synthetic stocks" that only track prices. Issuing companies also have a 30-day objection period to oppose third parties tokenizing their stocks, and there are limits on the number of stocks a single trading platform can list and the daily trading volume, seen as a transitional solution by regulators in light of the CLARITY legislation being stalled.
In the same week, the House Financial Services Committee voted to advance the "US Reserve Modernization Act," which aims to formally legislate the Bitcoin reserve plan established by Trump in 2025. The reserve funds are primarily sourced from criminal and civil forfeitures, and it requires the Treasury to continue increasing its holdings in a "budget-neutral" manner over the next five years. However, there is currently no similar bill passed in the Senate, leaving significant uncertainty regarding the bill's final passage.
Democratic Congressman Bill Foster opposed the bill, arguing that Bitcoin's volatility makes it unsuitable as a national reserve asset. This disagreement reflects the significant partisan and ideological divisions within the US Congress regarding the regulatory direction for crypto assets, even as the executive branch has accelerated related initiatives.
From a market mechanism perspective, the SEC's bypassing of the legislative deadlock in Congress to greenlight tokenized stocks through administrative exemptions means that traditional securities exchanges will face direct competition from decentralized trading platforms. Funds and trading volumes may accelerate from traditional matching systems to on-chain liquidity pools, while the advancement of Bitcoin reserve legislation further solidifies Bitcoin's narrative as a "quasi-sovereign asset."
Meanwhile, Standard Chartered's head of digital asset research, Geoff Kendrick, released a report setting a target price of $10 for Arbitrum token ARB by the end of 2030, representing about 70 times upside potential from the current price of approximately $0.13. Reasons include its support for enterprise-level tokenization infrastructure like Robinhood Chain, with daily fee revenue reaching about $2.8 million in September, and Standard Chartered's expectation that the global tokenized asset scale will grow from $340 billion to $4 trillion by the end of 2028.
Source: Public Information
ABAB AI Insight
The tug-of-war in the US Congress over cryptocurrency market structure legislation has lasted for several years. The CLARITY Act was previously passed in the House but has repeatedly faced obstacles in the Senate, mirroring the pattern of previous crypto legislation like the FIT21 Act since 2023, where the House passes but the Senate stalls. The SEC's move to bypass Congress and directly promote tokenized stocks through administrative exemptions continues the agency's consistent approach of filling legislative gaps with administrative measures.
The SEC's innovation exemption opens a compliant tokenization window for traditional financial institutions and DeFi platforms. Standard Chartered's predictions show that Robinhood Chain alone generated about $2.8 million in daily fee revenue in September, with funds accelerating from traditional securities settlement systems to on-chain tokenized assets and the underlying public chains that support these assets. Layer 2 networks like Arbitrum are thus viewed by Standard Chartered as "undervalued" infrastructure beneficiaries.
This pattern is reminiscent of the transition to electronic trading in the US over-the-counter market in the 1990s—at that time, regulation lagged behind technological changes, ultimately leading exchanges or regulatory agencies to promote market structure evolution through exemptions and pilot programs. The tokenized securities industry is currently in an "administrative first exploration during a legislative vacuum" early stage, and similar patterns are expected to replicate across more asset categories.
Essentially, this is a restructuring of the industry driven by regulatory changes—the legislative deadlock in Congress forces the SEC to open pathways for tokenized stocks through temporary exemptions, effectively transferring market structure rules that should be clarified by legislation to regulatory agencies for dynamic adjustment through administrative discretion. This "rule-making while piloting" approach is likely to benefit public chains and trading platforms with compliant infrastructure and enterprise customer resources in the short term, while potentially reshaping the competitive landscape and regulatory arbitrage space between traditional securities exchanges and on-chain markets in the long term.
ABAB News · Cognitive Law
Where Congress stalls, regulators always find a side door.
When legislation lags, administration will take the lead.
The valuation of infrastructure has always run ahead of consensus.