Clarity Act: Can it open Wall Street's $5.5 trillion tokenization market?

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A projection suggests that if the Clarity Act, a bill concerning the structure of the U.S. cryptocurrency market, passes, Wall Street's tokenization market, encompassing stocks, U.S. Treasury bonds, and real estate, could expand from its current $17 billion to $5.5 trillion by 2030.

According to FXStreet, an investment media outlet, on July 29 (local time), Citi Institute predicted that the Clarity Act would promote large-scale tokenization of real-world assets (RWA) such as stocks, U.S. Treasury bonds, private credit, real estate, and commodities. The analysis indicated that the key factors hindering the spread of tokenization were not a lack of technology, but rather regulatory risks, the absence of on-chain payment methods, and a fragmented financial system.

Growth is expected to be led by public market securities, such as U.S. stocks and Treasury bonds, rather than the private market, which remains in its early stages. The Depository Trust & Clearing Corporation (DTCC), New York Stock Exchange (NYSE), and Nasdaq were identified as key players to expand issuing, trading, and settlement infrastructure beyond the experimental stage to a large scale. Additionally, the $300 billion stablecoin market and tokenized deposits are expected to provide the on-chain payment infrastructure that has been lacking in existing tokenization businesses.

The Clarity Act delineates the oversight areas of the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), and establishes legal criteria for defining tokens as securities or commodities. Since securities are subject to strict registration and compliance requirements, while commodities are placed under a relatively flexible regulatory framework, clear classification is essential for institutional participation. Citi Institute assessed that institutions are already moving beyond the experimental stage by utilizing tokenization in token issuance, trading, and post-trade processing.

BlackRock's BUIDL has grown to $2.4 billion to $2.6 billion across multiple blockchains, and JPMorgan Chase's Kinexys, Franklin Templeton's Benji and FOBXX, BNY Mellon, Citi, and Fidelity are also pursuing related businesses. The New York Stock Exchange plans to launch a 24-hour tokenized securities trading platform supporting stablecoin settlements by the end of 2026, subject to regulatory approval. The U.S. Securities and Exchange Commission has approved Nasdaq to trade and settle some stocks and exchange-traded funds (ETFs) as tokenized assets.

21Shares emphasized that while investors can access the market through spot Bitcoin (BTC), Ethereum (ETH), and XRP (Ripple) ETFs without the Clarity Act, institutions need a continuous and legally binding system that cannot be easily overturned by a change in administration. However, the full Senate vote on the bill, which passed two House and Senate committees, has been delayed due to ongoing issues such as Russian sanctions and federal government personnel approvals. On Polymarket, the probability of the Clarity Act being enacted by 2026 has fallen from 56% on June 1 and 40% on July 1 to a recent 28%.

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