The U.S. Senate’s failure on Tuesday to advance the Clarity Act leaves the crypto industry without an overarching federal framework and keeps the respective roles of the SEC (U.S. securities regulator) and CFTC (U.S. derivatives regulator) unclear. Publicly traded crypto exchange Coinbase Global and stablecoin issuer Circle Internet fell 10% after the vote, reflecting concerns among U.S.-focused infrastructure providers. The lack of legal certainty limits U.S. retail investors’ access to a clear regulated market and makes it harder for institutions to commit capital at scale, while potentially weakening the country’s position in the competition to become a global crypto hub. Lin Han, CEO and founder of crypto exchange Gate, said capital and talent tend to move toward jurisdictions with clearer rules. Gate focuses primarily on Asia and ranks fifth on CoinGecko. Han said overseas digital-asset service providers with licenses in regulated markets are likely to benefit in the short term, although he described the U.S. impasse as harmful to the broader industry. The U.S. and U.K., whose full rules do not come into effect until next year, remain among the few major global financial hubs without clear industry rules. The European Union adopted its Markets in Crypto-Asset (MiCA) regulations in 2023, and the rules came fully into effect in July, while Asian markets continue developing digital-asset frameworks. Stefan Muehlbauer, head of U.S. government affairs at blockchain security firm CertiK, said the American public and domestic technology ecosystem are the main losers, while overseas hubs, grey-market operators, and expanding markets in Asia and Europe stand to gain. The SEC and CFTC can issue their own rules, including the SEC’s "innovation exemption" for tokenized securities trading published Thursday, but Muehlbauer said agency action cannot replace legislation. Legislation is particularly important for companies assessing multiyear investments, product launches, and compliance costs. The report also identifies APAC as an important testing ground as stablecoins enter regulated finance, examining the region’s rules and use cases as well as $RLUSD’s role.