By Nilmini Rubin, Hedera Chief Policy Officer and Isadora Arredondo, VP Global Policy.
In June, we wrote that policymakers were moving from consultation to action. In July, we entered a legislative phase. We are now in the moment where the difference between a framework that enables tokenization and one that fragments it comes down to the choices being made now.
Legislative CLARITY or regulatory clarity?
On July 22, Senate Banking Digital Assets Subcommittee Chair Cynthia Lummis (R-WY) released updated CLARITY Act legislative text totaling more than 600 pages reconciling the Senate Banking Committee and Agriculture Committee drafts. A Senate vote on the CLARITY Act has not been scheduled yet. Concerns around ethics, illicit finance, and stablecoin yield provisions will need to be resolved before the Senate considers the bill. While the reconciled text includes ethics language, it does not go far enough, according to potential Democratic supporters. With 60 votes required to move from procedural votes to a final vote and passage of the bill, without support from several Democrat senators, not to mention several Republican members that remain on the fence, the odds of any vote taking place on the CLARITY Act before the August recess are slim-to-none at this point. In short, the legislative window is nearly closed for immediate action.
Federal regulators are done waiting. The CFTC proposed rules targeting conflicts of interest in vertically integrated firms late last week. SEC Chair Paul Atkins and CFTC Chair Mike Selig advanced Project Crypto earlier this year, seeking to align the two agencies’ ongoing work towards the development of a durable regulatory framework for digital assets. Similarly, Chairman Atkins and outgoing Commissioner Hester Peirce have continually stated that the SEC plans to move forward with or without the CLARITY Act, as the window to develop durable rulemaking begins to close as we move closer to presidential elections in 2028.
Whether or not we get to any procedural vote on CLARITY before the August recess, the SEC and CFTC are already forging ahead: moving beyond talking about the importance of durable rulemaking to implementation of responsible frameworks that will underpin and promote the growth of tokenized markets.
In Europe, the plumbing is being built and someone has to own it
France and Germany reaffirmed support for the Market Integration and Supervision Package (MISP) on July 17, pressing for a Council general approach by October. The E6 group, an informal coalition of the six largest European Union economies, backed politically contentious issues such as centralized supervision of cryptoasset service providers and bringing multissuance under the remit of the European Banking Authority (EBA’s) but also moves that enjoy broad support such as extending the DLT Pilot Regime to all financial instruments. The unresolved question that will determine the pilot’s success is whether it provides scale, and whether the thresholds make it a commercially viable project or keep it limited to a sandbox.
MiCA’s transitional period ended on July 1 and now anyone operating without a license in Europe is doing so illegally. Established players have stopped serving EU customers after failing to secure a license. A Isadora argued this month, the real test is not how many firms received authorization, but whether MiCA keeps well-governed firms operating consistently across all 27 member states rather than pushing activity offshore.
The MiCA review goes further, touching DeFi, lending, staking, and the future of stablecoins and tokenized deposits.
In the UK, the regime lands and ‘champions’ get to work
The FCA published five policy statements wrapping up the core cryptoasset framework, covering stablecoin issuance, regulated activities, market abuse, admissions and disclosures, and the prudential regime, alongside a joint paper with the Bank of England on how their respective stablecoin frameworks interact. Changes throughout push toward clarity and proportionality rather than any overhaul of existing standards.
Chris Woolard’s first report as Wholesale Digital Markets Champion urged industry to prioritize end-to-end tokenization in repo, fixed income, and non-centrally-cleared derivatives, and pushed for an immediate pilot issuance of tokenized gilts. The Hedera Global Policy team submitted a response to the joint Bank of England/FCA call for input, making the case for the use of public permissioned networks in securities markets.
Lucy Rigby’s return as financial services minister provided welcome continuity for the industry during a period of significant political change. As Isadora also noted, lack of interoperability and fragmented liquidity across the asset life cycle remain the real barriers to adoption. With the authorization gateway opening in September 2026, the runway is shorter than it looks.
Across APAC, multiple frameworks are all maturing at once
Asia-Pacific continues to cement its role as a credible player in the digital assets race. Japan is moving to formally recognize crypto as financial assets, introducing insider-trading rules and stricter penalties. South Korea advanced stablecoin and tokenized deposit frameworks, with the Bank of Korea backing bank-led consortiums and the central bank expanding deposit pilots into government subsidies and infrastructure. Taiwan passed its landmark Virtual Asset Services Act covering seven VASP categories and a dedicated stablecoin regime. Thailand tightened AML controls, and Vietnam set administrative penalties for crypto violations ahead of its five-year market pilot.
APAC is not converging on a single model. For firms building across the region, each framework is worth engaging on its own terms.
What July actually settled
Convergence on intent is giving way to divergence on design, and that gap is where outcomes are decided.
As Nilmini wrote in a Finextra piece this month, tokenization’s long-term impact does not rest on the technology. It rests on the governance built around it, on cross-border interoperability, embedded auditability, and infrastructure that earns institutional trust. The rails matter, but the coordination around the rails matter more. The window to engage and shape the frameworks still being written remains open. July was a reminder that it tends to close faster than anyone expects.
Learn more about how Hedera’s Public Policy team is helping shape what comes next.
