Senate Republicans released a final rewrite of the CLARITY Act on Monday, bringing Congress closer to one of its most consequential decisions yet about digital assets. The last-minute changes run from ethics enforcement and community-bank protections to rules for software developers and conflicts of interest.
But the breadth of the bill points to a deeper problem: Washington keeps drifting from setting the rules into judging which investments, like Bitcoin, Americans should be making at all.
This battle is broader than Bitcoin: it cuts to the heart of financial regulation itself. Washington’s job is to set clear legal boundaries, require material disclosure, and punish fraud. It is the government’s role to establish a clear legal framework, not pick the winners. That decision belongs to investors.
But that is not what is happening right now. Regulators fight over jurisdiction. Incumbent banks protect their turf. Innovators ask which rules apply. Politicians posture along partisan lines. Congress must end this confusion and return to principled governance focused on setting simple rules of the road. CLARITY is a strong next step.
For years, Washington has approached digital assets through a hodgepodge of regulators, enforcement actions, overlapping jurisdictions and laws written before Bitcoin existed. At times, the rules have seemed clearest only after the government accused someone of breaking them.
The answer to this morass isn’t regulation for regulation’s sake. It is clarity: sensible rules that are predictable and knowable before they are enforced. But clarity shouldn’t become permission.
The government isn’t an investment committee. That principle has deep roots in American securities law. After the crash of 1929, Congress could have built a system in which Washington decided which public investments were sufficiently safe or sensible for Americans to own.
Instead, federal securities regulation was built largely around disclosure: give investors the material facts. Punish deception. Then let them decide what to do with their own money. That distinction helped make American capital markets the deepest and most dynamic in the world.
We approach this battle from multiple perspectives. We teach corporate law and financial markets and serve as directors of a publicly traded Bitcoin treasury company.
Corporations make consequential capital-allocation decisions every day. They enter new markets, invest in new technologies, make acquisitions and reshape their balance sheets. Corporate law has developed mechanisms for dealing with the consequences. Directors owe fiduciary duties to shareholders. Public companies disclose material information. Shareholders vote. Markets price risk. Courts adjudicate breaches. Regulators prosecute fraud.
That system rests on an important division of responsibility. The government establishes and enforces the legal framework. Boards allocate capital, and investors decide whether they approve of the result. Bitcoin provides a timely test of whether we will preserve that distinction.
The federal government itself has already recognized Bitcoin as a reserve asset. President Donald Trump last year established a Strategic Bitcoin Reserve and directed that Bitcoin placed into it generally not be sold. If the United States can conclude that Bitcoin has value as a reserve asset, corporate directors are entitled to make their own judgment.
Some will decide Bitcoin belongs on their balance sheets. Others won’t. Some investors will reward the strategy. Others will sell. That is how markets are supposed to work. New technologies routinely threaten existing business models. New forms of capital formation challenge established institutions. Innovation creates winners and losers. The principle extends beyond Bitcoin.
That is what makes the fight over CLARITY instructive. The competing interests surrounding the legislation aren’t merely arguing about one bill. They are arguing about the proper role of government when technology changes faster than the regulatory structure built around it.
That question won’t disappear if CLARITY passes, or if it fails. Bitcoin simply makes it harder to avoid. Some believe Bitcoin will transform finance. Others remain skeptical. Government shouldn’t settle that argument.
Investors will. That is the virtue of markets. People with different perspectives, expectations, and appetites for risk put their own capital behind their judgments. Capital moves accordingly. The alternative is to ask government to make those judgments for us.
The goal of regulatory clarity should be modest: make the law understandable, its boundaries predictable, require material information, and police deception. Set the rules of the road and punish fraud. Leave the verdict on Bitcoin to the people risking their own money.
More than a century ago, Louis Brandeis supplied the enduring metaphor: sunlight. Bring the material facts into the open. Let investors see what they are buying.
Then let them decide.
Jonathan Macey is a professor at Yale Law School and a member of the board of directors of Strive, Inc., a company with significant Bitcoin holdings. Logan Beirne is the Chief Legal Officer and member of the board of directors of Strive, Inc., and also teaches financial markets and corporate law at Yale Law School.
