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For more than a decade, the US crypto industry operated without a clear answer to a basic question: which regulator was in charge?
The Securities and Exchange Commission claimed authority over tokens it considered securities. The Commodity Futures Trading Commission argued many of the same assets were commodities under its jurisdiction. Exchanges built products, lawyers filed briefs, and courts made rulings. What Washington never did was pass a law.
That changed this week. The US Senate Banking Committee cleared the Digital Asset Market Clarity Act, moving the most comprehensive piece of crypto legislation in American history closer to becoming law. The bill draws a formal line between which digital assets fall under the SEC and which under the CFTC. It also covers stablecoin regulation, protections for decentralized finance platforms, insider trading provisions, and bankruptcy safeguards for crypto customers.
Bitcoin and Ethereum both moved higher after the vote. The market’s read was immediate: a defined regulatory perimeter is worth more to institutional capital than another year of legal ambiguity.
Ashish Singhal, co-founder of CoinSwitch, said the bill marks a structural shift rather than a legislative milestone. “The CLARITY Act is a significant moment for the global crypto industry because it finally attempts to address one of the ecosystem’s biggest unresolved challenges, regulatory clarity around digital assets. Despite over 40% of Americans already having exposure to crypto, the industry has largely operated without a clearly defined legislative framework for more than a decade. Questions around whether a token should be treated as a security, commodity, or a separate asset class altogether have often been debated in courtrooms instead of being clearly addressed through regulation.”
The implications run beyond asset classification. As long as the jurisdictional question remained open, institutions stayed cautious. ETF approvals, traditional finance integration, and broader market adoption all moved slowly against the backdrop of unresolved legal risk. Singhal noted that this changes the nature of the conversation. “The market is viewing the CLARITY Act as a strong signal that crypto regulation in the US is entering a more mature phase. Frameworks like these could eventually become important global reference points for how digital assets are regulated and integrated into the broader financial system.”
For Indian exchanges, the dysfunction in the world’s largest capital market was never a distant problem. Nischal Shetty, founder of WazirX, pointed to what the regulatory standoff had actually cost the industry. “For years, exchanges operating in the US did not know which regulator they answered to. Both the SEC and the CFTC claimed authority over the same assets, with no clear boundary between them. Platforms caught between them could not build products with confidence. Institutions stayed out. That is what held the market back, not a lack of interest. A clearly defined regulatory structure would allow exchanges to focus more on innovation and product development instead of navigating legal ambiguity.”
India’s own regulatory picture is still incomplete. A 30% flat tax on virtual digital asset gains and a 1% TDS on transactions have been in place since the 2022 Union Budget. What does not exist is a comprehensive framework covering asset classification, investor protections, or a clear regulatory authority. Millions of VDA holders transact daily on Indian platforms in a legal environment that taxes participation without defining it.
Shetty sees the US development as a direct input for Indian policymakers. “India has millions of VDA holders and no comprehensive framework exists currently. The US resolving this gives Indian policymakers a working reference model along with other existing frameworks such as MiCA,” he said, referring to the EU’s Markets in Crypto Assets regulation that came into force in 2024.
The EU parallel is instructive. MiCA gave European platforms a single compliance framework across 27 markets, unlocking institutional participation that had been waiting on regulatory certainty. If the CLARITY Act clears the full Senate and is signed into law, the US and EU together would represent functioning frameworks covering two of the three most significant capital markets in the world. India would have a choice about how to respond.
Vikaas M Sachdeva, CEO of BitDelta India, framed the development as part of how asset classes evolve. “Every financial category reaches a stage where growth alone is no longer enough and the conversation begins shifting towards accountability and long-term legitimacy. Frameworks like these are important because they help move the market from interpretation to greater operational clarity. Once that clarity begins to emerge, it naturally creates stronger foundations for infrastructure development and markets begin operating with responsible innovation.”
Sachdeva sees India’s position in the emerging global picture as consequential rather than peripheral. “India already has strong participation, a rapidly evolving compliance framework, and one of the world’s most digitally active investor bases. The next phase for the industry globally will be shaped by how effectively markets build trust around the asset class.”
The bill is not law yet. It must pass a full Senate floor vote, clear further procedural hurdles, and be signed by the president. The White House has said it wants that done by July 4. Whether it gets there on schedule is a Washington story.
What it means for digital asset markets, for institutional capital allocation, and for countries like India that are still working out their own frameworks, that part of the story is just beginning.
