Wall Street Wants the CLARITY Act, And the Senate Must Decide

Global asset manager Franklin Templeton has endorsed the CLARITY Act, adding its support to a coalition of major financial institutions backing legislation designed to establish a comprehensive regulatory framework for digital assets in the United States.

In a statement published on X, the firm said the bill would provide long-awaited regulatory certainty by clearly defining how digital assets should be regulated, outlining investor protections, and clarifying which federal agencies oversee different segments of the crypto market.

The endorsement comes as lawmakers face mounting pressure to advance the legislation before the Senate's August recess.

Wall Street Support Continues to Grow

Franklin Templeton, a subsidiary of Franklin Resources managing approximately $1.79 trillion in assets, joins a list of financial institutions that have publicly supported the legislation, including BlackRock, Fidelity, Goldman Sachs, and Charles Schwab.

Collectively, these firms oversee tens of trillions of dollars in assets and have increasingly advocated for clearer regulatory rules governing digital assets.

For many traditional financial institutions, regulatory certainty is viewed as a prerequisite for expanding digital asset offerings beyond pilot projects into broader commercial adoption.

What the CLARITY Act Would Change

The CLARITY Act seeks to establish a clearer division of regulatory authority between the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

Under the proposal, digital assets classified as securities would fall under SEC oversight, while those considered commodities would be regulated by the CFTC. Supporters argue the framework would replace years of regulatory uncertainty and enforcement-driven oversight with statutory rules defining each agency's jurisdiction.

The legislation is widely viewed as a significant step toward creating a more predictable legal environment for digital asset businesses operating in the United States.

Senate Votes Remain the Biggest Challenge

Despite growing support from the financial industry, the bill still faces political hurdles in the Senate.

The House of Representatives approved the CLARITY Act in July 2025 with a 294-134 bipartisan vote, while the Senate Banking Committee advanced the legislation in May by a 15-9 margin.

However, Senate passage requires 60 votes, meaning Republican lawmakers will likely need support from several Democrats to move the bill forward.

Although industry endorsements have continued to grow, no group of Democratic senators has publicly committed enough votes to ensure the legislation's passage.

Ethics Debate Slows Momentum

Negotiations have largely centered on ethics provisions related to public officials' involvement in digital assets.

In late July, Senate Republicans introduced revised legislative language that would prohibit the president and members of Congress from issuing or sponsoring digital assets for compensation while in office until January 20, 2029.

Some Democratic lawmakers argued the proposed restrictions did not go far enough, particularly in light of President Donald Trump's cryptocurrency-related business interests, leaving negotiations at an impasse.

Time Running Short

The legislative calendar has added further uncertainty.

Senate Majority Leader John Thune recently acknowledged that Congress is unlikely to complete consideration of the CLARITY Act before lawmakers leave Washington for the August recess, although he indicated efforts would continue to move the legislation forward.

With appropriations negotiations and midterm election priorities expected to dominate the fall agenda, many observers view the current legislative window as the most realistic opportunity for the bill to advance this year.

Reflecting that uncertainty, Galaxy Research recently lowered its estimated probability of the CLARITY Act becoming law in 2026 to around 30%, citing both the political landscape and limited time remaining on the congressional calendar.

Critics, including Senator Elizabeth Warren, have argued that the legislation does not provide sufficient consumer protections and fails to adequately address illicit finance risks associated with digital assets.

Institutional Backing Grows, Political Uncertainty Remains

Franklin Templeton's endorsement highlights the increasingly broad consensus among major financial institutions that the U.S. digital asset industry requires a comprehensive regulatory framework.

Yet despite support from some of the world's largest asset managers, the bill's future ultimately depends less on industry backing than on whether lawmakers can build the bipartisan coalition necessary to secure final Senate approval before the legislative window closes.