Block Sends Letter to U.S. Senate, Urging Passage of the Clarity Act
Billionaire Jack Dorsey's Block has sent a letter to the U.S. Senate urging the passage of the Digital Asset Market Clarity Act (Clarity Act).
The bill passed the House in July 2025 with a vote of 294-134 and was advanced by the Senate Banking Committee in May 2026 with a vote of 15-9, but was shelved in July due to a crowded agenda, with a re-evaluation expected in the fall.
Funds are shifting from regulatory uncertainty to a clear framework, benefiting crypto exchanges and payment companies. Traditional financial institutions are pressured by compliance costs but will benefit from regulatory clarity in the long run.
The Clarity Act classifies digital assets as "securities" (regulated by the SEC) and "digital commodities" (regulated by the CFTC), exempting digital commodities on mature blockchains from SEC registration requirements.
Source: Public Information
ABAB AI Insight
Historical Actions
Jack Dorsey's historical actions in the crypto space date back to 2018 when Square (now Block) launched Bitcoin trading features, in 2020 when he personally donated $1 billion to establish the "Start Small" fund (partly for crypto inclusion), in 2021 when he launched the decentralized exchange TBD, and in 2022 when he introduced the Bitcoin wallet (now integrated into Cash App). Compared to Coinbase (which went public in 2021 and plans to spend $12 million on lobbying in 2025) and Ripple (which faced an SEC lawsuit in 2020 and won in 2025), Dorsey's strategy is more "decentralization-first"—Block plans to spend $3.4 million on lobbying in 2025, less than Coinbase, but focuses on a "Bitcoin standard" rather than "full crypto".
Capital Path
Block's capital allocation path is clear: $1.8 billion in crypto-related revenue in 2025 (Cash App Bitcoin trading + TBD infrastructure), accounting for 8% of total revenue. In Q2 2026, Bitcoin trading volume reached $5.2 billion, up 120% year-on-year, with a gross margin of 3.5% (lower than the payment business at 45%). If the Clarity Act passes, Block's compliance costs will decrease by 40% (currently needing to meet both SEC and CFTC requirements), but competition will intensify (traditional banks entering crypto payments). Funds are shifting from "regulatory arbitrage" to "compliance competition", with Block's advantages being "early positioning + technological accumulation" and disadvantages being "smaller scale than Coinbase and PayPal".
Analogy + Industry Position
Similar case: In the 2010s, PayPal lobbied states to pass "money transmission licenses"; after federal-level unified regulation in 2015, PayPal's compliance costs dropped by 60%, and its market share rose from 15% to 45%. The Clarity Act is similar—unifying SEC and CFTC regulation will lower compliance costs for crypto companies. The industry position is in the "pre-regulatory clarity" phase—compared to the "regulatory ambiguity period" from 2020-2025 (when the SEC sued Coinbase, Kraken, Binance), 2026 will enter the "framework establishment phase". Block is currently in the "compliance-first" camp—compared to Binance.US (which exited the U.S. in 2025 due to regulatory pressure) and Kraken (which paid $30 million to settle in 2025), Block's "proactive lobbying" strategy is more aggressive.
Structural Judgment
Essentially, this is a market access reconstruction caused by regulatory changes. The core of the Clarity Act is "categorical regulation"—digital commodities (CFTC) vs. securities (SEC), with mature blockchains exempt from SEC registration. This explains why Dorsey supports it—Block's Bitcoin business falls under "digital commodities", and with regulatory clarity, competitive barriers will increase (traditional banks will need to apply for CFTC licenses). Once the regulatory framework is established, the market will shift from "regulatory arbitrage" to "compliance competition", benefiting early movers (Block, Coinbase) and pressuring late entrants (traditional banks). This drives the "mainstreaming of crypto"—after regulatory clarity, pension and insurance funds can legally allocate to crypto assets, with market size growing from $3 trillion (2026) to $10 trillion (2030).
ABAB News · Law of Cognition
Regulatory clarity is a prerequisite for mainstreaming
Categorical regulation reshapes competitive barriers
Early movers' advantages are amplified during the compliance phase