Former U.S. Defense Secretary Mark Esper urged the Senate to pass the CLARITY Act before its September 15 cloture vote, saying that delayed crypto regulations could weaken financial and national security. The House approved the bill 294‑134 in July 2025, and the Senate Banking Committee advanced its market‑structure text 15‑9, with two Democrats joining Republicans. Esper argued that clear rules for digital assets would improve oversight of transactions, preserve the dollar’s role in global finance, and strengthen sanctions enforcement, while offshore activity could hinder U.S. agencies’ ability to track illicit flows. He cited threats from sanctioned networks and North Korean cyber groups such as the Lazarus Group, and warned that China’s development of payment systems independent of U.S. control could diminish Washington’s influence.

The legislation would assign primary oversight of digital commodities to the Commodity Futures Trading Commission and securities oversight to the Securities and Exchange Commission, and would give the Treasury expanded authority under the USA PATRIOT Act to restrict transfers tied to foreign jurisdictions posing money‑laundering concerns. Supporters say the measure would make it harder for criminals and foreign adversaries to misuse the U.S. financial system, while industry groups warn that overly strict limits could push customers toward less regulated services. Coinbase Chief Policy Officer Faryar Shirzad quoted Esper on X, urging lawmakers to act with urgency.

Political and market reactions include banking organizations requesting revisions to Section 404, Circle’s share falling more than 2% in premarket trading, and prediction‑market traders lowering passage odds to about 10% after a decline from 82% earlier in the year. CFTC Chair Michael Selig said the agency can continue developing digital‑asset proposals under existing authority, though any regulations would remain confined to the Commodity Exchange Act and would focus on derivatives, disclosure and market integrity rather than full spot‑market powers.

The bill now faces a 60‑vote threshold for cloture, requiring bipartisan support that has so far been difficult to achieve, and its ultimate passage remains uncertain.