CLARITY hasn’t passed yet, but Wall Street is already open for business

On May 4, the White House urged Congress to send the Clarity Act to the President's desk before July 4. This crypto market structure bill had already passed the House of Representatives by a vote of 294 to 134 in July 2025 but has been stalled in the Senate for nearly a year.

The Senate Banking Committee, chaired by Tim Scott, has locked in the markup process for completion within May, aiming to push the bill to a full Senate vote in June or July. Standing in the way is an "ethics clause" demanded by Democratic lawmakers, which would prohibit senior government officials from personally profiting from crypto assets while in office. The target of this clause is the President himself.

Two days later, on May 6, Morgan Stanley's E*Trade opened spot trading for Bitcoin, Ethereum, and Solana to its 8.6 million retail clients at a 0.50% fee. This is currently the lowest retail crypto fee among mainstream Wall Street brokerages. The bill hasn't passed yet, but traditional big banks have already started doing business.

Whether Congress waits for the bill or not, Wall Street has already given its answer.

Wall Street Has Already Opened for Business

Before the bill's passage, traditional brokerages made a concentrated entry between April and May 2026, pushing retail fees to a new floor.

Here's the timeline. On February 22, 2018, Robinhood was the first to integrate crypto trading into its retail internet brokerage, launching with zero commission (including spread). That same year, Coinbase launched its retail app with fees ranging from 0.99% to 2.99% plus a 0.5% spread. In 2022, Coinbase introduced Advanced Trade, reducing retail fees to 0.40% - 0.60%. Fidelity Crypto launched in 2023 with a 1% fee. Then came a two-year gap.

In early April 2026, Charles Schwab launched Schwab Crypto, phasing in spot Bitcoin and Ethereum trading for retail clients at a 0.75% fee. A month later, on May 6, Morgan Stanley's E*Trade followed suit with 0.50%, covering Bitcoin, Ethereum, and Solana. According to BeInCrypto, this is the lowest retail crypto trading fee among traditional major banks.

A comparison of fee structures reveals the pressure. Coinbase's standard app commonly charges retail users 0.99% - 2.99% plus a 0.5% spread, effectively totaling 1.5% - 3.5%. E*Trade's 0.5% cuts this figure to a third. Fidelity's 1% has become the most expensive among peers. Coinbase Advanced Trade remains competitive, but it's a professional interface targeting high-frequency and high-net-worth users, not the go-to retail option for average customers.

Why the concentrated opening in April-May 2026? Two key anchor points. One is the GENIUS Act, the stablecoin legal framework, signed into law in July 2025, providing compliant clarity for traditional financial institutions to custody and settle stablecoins. The other is the Clarity Act, which is about to enter the Senate markup process. Regardless of the final outcome, the contours of the mainstream market structure are already clear, and traditional major banks are no longer worried about being targeted by regulators retroactively after entering the market. Wall Street is making decisions based on the probability distribution that the Clarity Act will likely pass, not waiting for the bill to be signed.

The "Ethics Clause" Targets the President

The ethics clause demanded by Democratic lawmakers has been repeatedly submitted to the White House since 2025, only to be repeatedly rejected. The reason isn't abstract. According to a Bloomberg report from January 2026, about one-fifth of the Trump family's $6.8 billion wealth comes directly from crypto projects.

Breaking down these projects reveals more specifics. Realized cash flow totals approximately $1.47 billion, primarily from four products. Token sales from World Liberty Financial (WLFI) are the largest component. As of December 2025, the Trump family has profited approximately $1 billion from this DeFi project, including $550 million raised through a public offering.

The $TRUMP memecoin launched three days before the January 2025 inauguration, generating $362 million in fees and trading profits for the family. Melania's $MELANIA memecoin followed shortly after, contributing approximately $65 million. Interest from USD1 stablecoin reserves amounted to $42 million.

Unrealized holdings are valued at approximately $2.8 billion. WLFI still has $1.5 billion worth of unsold tokens on its books, but this is highly volatile and subject to WLFI's price fluctuations. According to FinanceFeeds, Trump Media's Bitcoin reserves are estimated between 9,500 and 11,500 BTC, valued at roughly $840 million at current Bitcoin prices. The combined valuation of the USD1 business and equity in American Bitcoin Mining, among others, totals approximately $460 million.

Adding realized and unrealized values together totals about $4.3 billion. This is the real number behind the ethics clause. The version pushed by Senator Elizabeth Warren and others explicitly states, "Prohibits current senior officials from personally profiting from crypto assets while in office." A compromise version that made it to the White House was sent back. Whether the bill goes to a full Senate vote with this clause essentially asks every senator: Are you willing to cast a vote on the record, publicly cutting into this $4.3 billion pie controlled by the President's family?

Will CLARITY Pass This Year?

The Clarity Act forcibly places all digital assets into three buckets. The first bucket is "digital commodities," regulated by the CFTC, corresponding to tokens operating on "mature blockchain systems." The Act has two hard criteria for defining "mature": first, the network must have complete functionality capable of reaching consensus; second, it must be sufficiently decentralized such that no single entity can unilaterally modify the protocol or governance.

The second bucket is "investment contract assets," regulated by the SEC, corresponding to tokens representing equity, debt, or similar rights, such as tokenized stocks, traditional securities distributed on-chain, and RWA (real estate, notes, accounts receivable). The third bucket is payment stablecoins, overseen by banking regulators, requiring compliance with capital, custody, and anti-manipulation standards.

Compared to FIT21, which died in the Senate in 2024, the Clarity Act has three upgrades. The classification of stablecoins has changed from "left unspecified" to "assigned by trading venue." Stablecoin transactions on CFTC platforms are regulated by the CFTC, while those on SEC platforms fall under the SEC, but the SEC retains only anti-fraud authority.

DeFi exemptions have shifted from a general safe harbor principle to a list of specific activity exemptions. Operating a custody front-end, running a node, and publishing code do not trigger registration obligations. Exchange registration has changed from "inter-agency coordination" to a mandatory requirement for dual registration for intermediaries handling digital commodities, even if that intermediary is already an SEC-licensed broker-dealer.

The logic of the bill is clear: to codify into law the biggest uncertainty the crypto industry has faced in recent years – "who exactly regulates this."

The Clarity Act doesn't have many predecessors in its current position.

According to public statements from Representative French Hill's office, over 40 crypto and blockchain-related bills were introduced in the 116th Congress (2019-2020) alone. The final passage rate for these bills was zero. The 118th Congress (2023-2024) saw FIT21 pass the House in May 2024. It was the first crypto market structure bill to pass a full House vote, but it died in the Senate.

On July 18, 2025, President Trump signed the GENIUS Act into law, regulating payment stablecoins. This was the first, and remains the only, crypto-related federal bill signed into law in six years. On July 17 of the same year, the House passed the Clarity Act with a vote of 294 to 134. Theoretically, the Clarity Act has reached the same position as FIT21: passed by the House, awaiting a Senate vote.

The difference lies in the political environment. During the FIT21 era, the Democratic Party controlled the White House, and there was no top-level impetus for crypto legislation. Now, the Trump administration is openly pushing for it. However, the compromise version of the ethics clause was rejected by the White House, and key Democratic senators remain unconvinced. If it misses the first week of August, the Senate will be in recess until September 14. Considering the November 3 midterm elections, whether it can be signed in 2026 is no longer entirely up to "the White House's desire."

Looking at historical records: out of 50+ bills over 6 years, only 1 became law. Whether the Clarity Act will be the second will be decided in the next two months.