Trump administration crypto advisor pressures Congress: Why the CLARITY Act has become the last chance for regulation in 2026

The U.S. cryptocurrency regulation has entered a critical political window. Patrick Witt, Executive Director of the Digital Asset Advisory Committee under the Trump administration, recently publicly called on Congress to reach a compromise on the CLARITY Act as soon as possible, with a straightforward reason: a multi-trillion-dollar industry cannot operate indefinitely in a regulatory vacuum, and the current pro-crypto political environment may not come again. This is not only a technical battle over the bill’s provisions but also a contest for the future position of the crypto market.

The Regulatory Power Struggle Between SEC and CFTC

The core controversy currently surrounding the Senate’s debate on the CLARITY Act essentially involves delineating the authority between two regulatory agencies. Specifically:

Coinbase’s changing stance best illustrates industry anxiety. The largest U.S. crypto exchange has withdrawn its support for the bill draft due to objections to the above clauses. This also caused the Senate Banking Committee to postpone its scheduled hearing. In other words, even within the crypto industry, the attitude toward this bill is “reserved support.”

Compromise or Wait: Two Different Paths

Patrick Witt’s position is clear: rather than waiting for a “perfect version,” it’s better to seize the current window to push forward a “practical framework.” He even explicitly criticized Coinbase CEO Brian Armstrong’s stance of “preferably no bill.”

The logic behind this is worth pondering:

• The current political environment is crypto-friendly: Trump in office, Republicans controlling Congress, and a relatively clear regulatory framework from SEC and CFTC
• The time window is closing: latest reports suggest a 78% chance Democrats will regain control of the House
• The risks in the future are greater: missing this window could lead to a more stringent Democratic-led version

From another perspective, Witt’s logic is: the “85-point plan” now is much better than the “40-point plan” that might emerge in two years.

Time Pressure: The Final Sprint Before Midterm Elections

The urgency to advance this bill ultimately stems from the U.S. political schedule. The midterm elections are scheduled for November 2026, when all House seats and some Senate seats will be up for re-election.

Current key dates:

• January 27: Senate Agriculture Committee will hold a hearing on the CLARITY Act
• February to October: Critical period for legislative progress
• November: Midterm elections, potentially reshaping the political landscape

From this perspective, Witt’s pressure is not just industry lobbying but a reminder to Congress: if no action is taken now, this opportunity may truly be lost.

Practical Significance for the Market

Whether this bill passes or not will directly impact several key issues:

1. Legal status of Bitcoin and Ethereum: The bill will clarify the legal identity of these assets within the U.S. financial system
2. Future of Stablecoins: Determines whether stablecoins like USDC, USDT can continue operating in the U.S. market
3. Institutional Capital Flows: Many traditional financial institutions are waiting for clear regulatory frameworks before large-scale entry
4. U.S. Competitiveness: If the regulatory environment is not friendly enough, crypto innovation may shift to other countries

In this sense, the CLARITY Act is not just about regulation but also a strategic choice for the U.S. in the global crypto competition.

Summary

The CLARITY Act has become the core battleground of crypto policy in 2026, for a simple reason: this may be the most favorable legislative window the crypto industry can access in the next decade. Patrick Witt’s pressure reflects a reality—while the industry has reservations about certain provisions, there is consensus on the need for “a clear regulatory framework.”

The key point to watch is the hearing by the Senate Agriculture Committee on January 27. From this hearing onward, we will see whether the CLARITY Act can truly advance within this window. If successful, the U.S. crypto market will enter a new institutionalized phase; if not, subsequent regulatory progress will face much greater difficulty. For investors paying attention to U.S. crypto policy developments, the coming months are indeed critical.