By David Kermaani, Director of Sales, Americas at ChainUp
Key Takeaways
- Regulatory paralysis, not technology, is the primary barrier keeping risk-averse institutional allocators from deploying capital at scale into digital assets.
- Institutions are not waiting on the CLARITY Act alone. They need both the securities framework (CLARITY Act) and the commodities framework (Digital Commodity Intermediaries Act) to merge before they treat U.S. digital assets as a fully settled asset class.
- Global finance moves top-down. Establishing one unified legal framework first is what unlocks institutional rails, onshores mobile capital, and drives operational gains like real-time, atomic settlement.
I just spent a week on Capitol Hill, and it sharpened how I answer the question institutions ask me most: what is actually stopping them from deploying into digital assets?
The market is well past its speculative phase. Almost every conversation I have now is about permanent institutional integration, and yet most crypto-curious financial institutions are still parked on the sidelines.
The standard explanation is that they are waiting on “regulatory clarity.” I think the market is misdiagnosing the problem.
I recently returned from Washington, D.C., representing ChainUp in a delegation organized by The Digital Chamber. Our mandate was direct: meet with key Senate offices to discuss the trajectory of the Digital Asset Market Clarity Act (the CLARITY Act).
What became obvious in those rooms is that institutions aren’t waiting for a single landmark bill. They are waiting for a dual-track legislative gap to close.
Why Institutional Capital Stays Sidelined in the U.S. Crypto Market
To understand why large-scale corporate capital is parked, look at the landscape through the eyes of a corporate fiduciary. Under the old “regulation by enforcement” approach, the risk of retrospective litigation makes large-scale deployment an operational impossibility.
The CLARITY Act is a real step forward. Advanced 15-9 by the Senate Banking Committee, it targets the structural blockers that keep corporate capital frozen:
- Ending the SEC-CFTC tug-of-war. For years, institutions have been caught in the crossfire with no statutory definition of when an asset transitions from a security to a commodity. The CLARITY Act introduces a “mature blockchain” test to codify true decentralization.
- Stablecoin commercial infrastructure. Building on the GENIUS Act, last year’s law setting federal rules for payment stablecoins, the bill carefully navigates banking-sector concerns. It manages deposit flight by restricting deposit-interest returns while protecting usage-based consumer incentives for platform transactions and staking.
- Removing custody barriers. The bill targets the accounting hurdles that have functionally blocked regulated U.S. banks from offering digital asset custody at scale, clearing the way for top-tier financial holding companies to use blockchain networks safely.
But the CLARITY Act is only half the equation.
Senate Banking has advanced the securities and stablecoin side. The commodities side runs through a completely separate track: the Senate Agriculture Committee’s Digital Commodity Intermediaries Act.
To a compliance officer at a major institution, clarity on stablecoins means very little if the commodities spot market stays unmapped. The market reads it as one ecosystem. So allocated capital stays sidelined until both halves land and merge into a single Senate floor package. Every month of this limbo carries a measurable cost.
Key Insights from Capitol Hill: Bridging the CLARITY Act and DCIA Gap
A lot of people misunderstand how policy advocacy actually works. Real progress doesn’t happen in photo ops. It happens in quiet rooms with Senate legislative staff, the policy experts who draft and negotiate the actual text of the laws.
Our delegation took a deliberate approach to gauge true sentiment on the Hill:
- Leaning into friction. In offices that historically leaned against digital asset legislation, we didn’t push a pitch; we listened. We worked to understand their specific hesitations, which usually centered on consumer protection, systemic risk, and AML/KYC enforcement. Once we understood the exact friction points, we could offer concrete, infrastructure-level data on how modern compliance tech mitigates those risks.
- Intelligence gathering with allies. In offices that already favored the bill, we shifted to gathering intelligence. We asked one direct question: what specific blockers are your peers across the aisle wrestling with?
What we gathered is that the hesitation is mostly logistical. Staff are working through the structural plumbing of how these bills interact once merged. The momentum is there, but the operational alignment still takes time.
Global Crypto Regulation and American Financial Competitiveness
The urgency behind these conversations points to a broader reality: capital is mobile.
While the U.S. tracks iron out their jurisdictional boundaries, competing financial hubs across Europe and Asia are not waiting. They are actively onboarding top-tier institutional projects under comprehensive, already-finalized frameworks.
A unified market structure package is fundamentally a question of American financial competitiveness. When the rules of engagement are statutory and clear, risk-averse enterprise capital exits offshore gray markets and onshores into transparent, domestic ecosystems.
How Institutional Infrastructure and Atomic Settlement Drive Blockchain Mass Adoption
Global finance operates top-down. Mass adoption follows the infrastructure, arriving only once the institutional rails and structural guardrails are cemented.
Once this dual-track package lands, the operational gains will reshape how capital moves:
- Atomic settlement. Moving from legacy T+2 cycles to real-time, atomic settlement frees up trillions in trapped liquidity and removes counterparty risk.
- Frictionless mobility. Standardized, blockchain-native compliance frameworks eliminate the fragmented intermediary networks that currently slow cross-border treasury management.
This is the work we do at ChainUp every day. The debate on Capitol Hill is about balancing fast financial innovation with compliant guardrails. That is exactly where we sit. We build the secure, compliant, institutional-grade infrastructure that makes this transition safe and scalable.
If you’re weighing how to position your institution for the next phase, I’m having these conversations now. Reach out and let’s talk specifics.
