Clarity Act Fails to Pass in US Senate, Digital Asset Tax Debate Resurfaces

The Clarity Act's passage ultimately failed. [Photo: Reve AI]

Key topics dominating the digital asset market this week were 'Clarity Act' developments. Despite warnings from Senator Sinia Lumis that missing this session would mean losing opportunities until 2030, a cloture vote on the bill in the Senate on October 15 (local time) saw it fall short of the required 60 votes with only 49 'yes' votes. Bitcoin dropped approximately 3-4% to around $76,000 immediately after news of the rejection.

• US Senate rejects Clarity Act, Bitcoin falls -3% • Michael Novogratz: 'Clarity Act isn't over... will go to full chamber' • Senator Warren opposes Clarity Act but continues pushing for cryptocurrency regulation

The bill failed due to unresolved issues regarding interest payments on stablecoin holdings, the scope of money transmission regulations applying to developers and infrastructure providers, and Trump's personal ethics guidelines related to his cryptocurrency business.

While the act is not completely scrapped, prospects for reintroduction before year-end are slim as Congress faces a tight schedule ahead of November midterms. The 120th Congress will automatically dismiss pending bills after its formation in December.

Senator Elizabeth Warren (D), who has long opposed the Clarity Act, announced she would continue pursuing independent cryptocurrency regulation legislation. She criticized the bill for lacking sufficient investor protections and is expected to make these issues central during future negotiations.

Ultimately, this rejection shows that fundamental disagreements between parties over what constitutes a proper 'Clarity Act' remain unresolved rather than whether such an act is necessary.

Digital asset taxation [Photo: Pixabay]

• Taxation debate intensifies as government confirms digital assets will be taxed starting 2027, while financial investment income tax remains cautious

Domestically, the tax issue has reignited. The government confirmed it plans to implement digital asset taxation from 2027, but industry concerns about fairness compared to stock taxes and insufficient preparation for acquisition cost verification and tax rate structures persist. Industry groups argue that information collection on foreign exchanges and individual wallets must be resolved before implementation.

• Quantum computing threat to Bitcoin security gains attention

Market discussions also highlighted quantum computing's long-term threat to Bitcoin security. Recent Google research resurfaced concerns that quantum computers could break elliptic curve cryptography with far fewer resources than previously estimated, potentially decrypting private keys much faster than expected.

IonQ, a quantum computing company, recently unveiled its sixth-generation quantum computer and plans customer delivery by 2027. While immediate threats are unlikely, industry consensus suggests 'collect now, decrypt later' strategies may already be underway, prompting some long-term holders to consider transitioning to quantum-resistant wallets.

Nasdaq [Photo: Pixabay]

• Nasdaq invests $100 million in Kraken's parent company Paxos, expanding tokenized stock collaboration

Traditional finance infrastructure investment accelerated. Nasdaq invested $100 million through its venture arm into Kraken's parent company Paxos, valuing the firm at $21 billion. This marks a significant example of a traditional exchange directly investing in crypto infrastructure.

Similarly, global banks are accelerating tokenized deposit offerings alongside stablecoin expansion. Banks aim to defend payment and remittance markets from stablecoin encroachment while leveraging blockchain-based real-time settlement benefits within existing regulatory frameworks.

• Cryptocurrency firms weigh federal banking charter's pros and cons

Cryptocurrency companies continue debating the merits of obtaining a U.S. federal bank charter. While it provides FDIC insurance and access to Fed payment systems, it also subjects firms to stricter capital requirements and ongoing supervision.

Industry sources describe this as 'trading freedom for safety,' noting that obtaining a charter doesn't necessarily mean improved security but rather represents an industry's dual attitude of seeking regulatory clarity while fearing the burden such clarity would impose.

Meanwhile, significant capital movements also emerged at the intersection of AI and digital assets. Nvidia is reportedly considering up to $10 billion in investment in Anthropic's IPO, signaling potential indirect impacts on crypto funding environments as massive capital flows into AI infrastructure demand affect venture capital availability for cryptocurrency companies.