BlackRock (BLK) and Fidelity, two of the biggest asset managers on Wall Street, are throwing their support behind the Clarity Act that seeks to regulate cryptocurrencies such as Bitcoin (BTC).
The Digital Asset Market Clarity Act would establish a new regulatory framework for the U.S. crypto industry and make sweeping changes to how digital assets are governed.
The legislation would give oversight of crypto to both the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
However, the draft bill that is winding its way through Congress has divided Wall Street, with some banks and asset managers worried it will take business away from them.
JPMorgan Chase (JPM), the largest U.S. bank, has been a notable critic of the Clarity Act, saying it does not want crypto to offer yield similar to interest applied to savings accounts.
But over the past week, several leading Wall Street firms have thrown their support behind the Clarity Act ahead of Congress breaking for its summer recess in August.
BlackRock, Fidelity, Franklin Templeton (BEN), Goldman Sachs (GS) and SoFi (SOFI) have all urged Congress to pass the legislation, arguing that clear rules will protect investors.
The endorsements are unlikely to lead to the swift passage of the Clarity Act as the legislation has been put on the backburner in the U.S. Senate in favour of other bills.
The U.S. Senate is scheduled to begin its summer recess on August 8, leaving only a handful of legislative days to move the bill forward before the break.
Betting on prediction markets places the odds that the Clarity Act will become law this year at around 30%.
Complicating matters is the U.S. midterm elections scheduled to take place this November, which are likely to disrupt Congress through the end of 2026 and into 2027.
Bitcoin is trading at $64,200 U.S. on July 29.
