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Senate fails to pass CLARITY Act as tokenization momentum grows
The bill is backed by major Wall Street firms, including Fidelity, Goldman Sachs, and Franklin Templeton, as tokenization expands through infrastructure used to settle stocks and Treasuries.
CoinDesk reports that while the Senate did not pass the CLARITY Act, large U.S. financial institutions have continued expanding on-chain activity, including efforts to tokenize ETF holdings and to use DTCC production infrastructure for tokenized stocks and Treasuries. The article notes that more than 50 firms, including BlackRock and Goldman Sachs, have signed on to tokenize assets through the same infrastructure.
The piece cites BlackRock CEO commentary describing tokenization as a way to update the financial system’s “plumbing.” It also argues that Congress should not treat the CLARITY Act as a crypto-only issue, because shocks can spread through shared market infrastructure regardless of which institutions or asset classes are directly involved.
CoinDesk highlights that stablecoins now hold more than $100 billion in Treasury bills, and that if a large stablecoin broke and was forced to sell, the article says the shock would land in the funding markets traditional desks rely on. It also points to Federal Reserve staff concern and recalls a 2023 episode in which Circle’s USDC briefly lost its peg due to reserves held at a failing bank.
The article says Federal Reserve staff and international bodies such as the IMF have warned that a stablecoin-linked shock could travel faster than in 2008, given market volatility and the lack of clearing requirements to contain a default. It adds that CLARITY backers include Fidelity, Goldman Sachs, and Franklin Templeton, while critics argue the rules are too soft.