The CLARITY Act is the most important piece of financial market legislation Congress has considered in years. At its core, it does something remarkably simple: it establishes clear rules for an industry that has spent the better part of a decade operating in regulatory limbo. But Congress is on the verge of making a terrible mistake by squandering the opportunity to appropriately regulate this industry that has fought for clarity for so long.
Markets thrive on rules. Entrepreneurs build and Institutions invest when they know the rules. Consumers are better protected when everyone knows the rules. Right now, America has some of the world’s best innovators building the next generation of financial infrastructure onchain, yet for years they’ve been forced to navigate a regulatory framework defined more by lawsuits than legislation.
That isn’t good for anyone. It isn’t good for investors, and it isn’t good for innovation. It certainly isn’t good for American competitiveness. While we regulate and debate in circles, the rest of the world is moving forward without us.
Everyday Congress delays, it sends another signal that America is comfortable exporting the next generation of financial innovation along with the jobs and economic growth that come with it.
That’s why the CLARITY Act matters. This isn’t simply a crypto bill. It’s a bill about whether the United States intends to lead the future of finance or watch someone else do it.
This doesn’t mean the concerns surrounding the legislation aren’t real. I’ve been one of Donald Trump’s most outspoken critics since my brief tenure in his White House. I don’t believe elected officials and their families should be issuing cryptocurrencies, promoting meme coins or creating even the appearance of profiting from public office. I don’t even think they should be trading equities, but that’s a fight for another day. But public trust is essential, and ethics rules matter.
Democrats were right to insist that those concerns be addressed, and over the course of these negotiations, Republicans and the White House acepted ethics provisions that would have been unthinkable only months ago. The legislation evolved because lawmakers raised legitimate concerns, and those concerns were taken seriously.
That’s exactly how bipartisan lawmaking is supposed to work.
Yet now the conversation has shifted again. The debate is no longer about whether the CLARITY Act contains suitable ethics provisions. It’s about whether this bill should also become the vehicle for rewriting the broader framework governing federal ethics law.
Those are two different conversations. No state attorney generals have jurisdiction over ethics and trying to change that paradigm now would mean squandering the best chance we have as cementing America as the home of financial innovation for decades to come.
If Congress believes federal ethics laws need to be stronger, I agree. Congress should strengthen them. It should tighten conflict-of-interest rules, improve disclosure requirements and revisit insider trading laws. Most importantly, those reforms should apply consistently across stocks, private businesses, real estate and digital assets alike.
But don’t hold America’s financial and technological future hostage while trying to solve every ethics question in Washington through a single market structure bill.
No major piece of legislation has ever been expected to solve every problem facing Congress before it could pass. The CLARITY Act shouldn’t be held to a different standard simply because the technology is new or the politics are uncomfortable.
Some have argued that the current ethics provisions still don’t go far enough. Reasonable people can disagree about where the line should be. But there comes a point in every negotiation when the question stops being “How do we improve this bill?” and becomes “Are we willing to let the perfect become the enemy of good?”
Congress is approaching that point.
Meanwhile, entrepreneurs don’t have the luxury of waiting. Capital doesn’t wait while Washington negotiates. Engineers don’t stop building because Congress can’t agree on language. Businesses make decisions every day about where to invest, where to hire and where to launch new products. Increasingly, those decisions are being made outside the United States which should concern every member of Congress, regardless of party.
The current debate over digital assets is about whether America still believes that innovation should happen within our borders or not. It’s about whether we want to write the rules for emerging technologies or allow other countries to do it for us. And it’s about whether Congress is still capable of reaching bipartisan compromise on issues that matter most for our economic future.
The CLARITY Act is not a perfect bill. Consequential legislation seldom is. But it is a serious, bipartisan effort to replace regulatory uncertainty with clear rules, stronger consumer protections, and a framework that allows innovation to flourish under American law instead of moving overseas.
The ethics debate made the bill stronger. It forced lawmakers to confront difficult but important questions about public trust and conflicts of interest. But it should not become the reason America loses its opportunity to lead.
Congress should pass the CLARITY Act before that opportunity slips away.
The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.
Anthony Scaramucci is founder and managing partner of SkyBridge Capital, co-host of The Rest Is Politics US podcast, and author of upcoming book “All the Wrong Moves”.
