Former Defense Secretary Mark Esper says the CLARITY Act would extend Patriot Act tools to digital assets, closing offshore loopholes used by North Korea and sanctioned regimes. The Senate may vote in September.
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Mark Esper, the former U.S. Secretary of Defense, is warning the Senate that the CLARITY Act is a national security priority, not a financial services bill. He said failing to pass it would risk losing visibility into international financial flows and the sanctions capabilities that depend on the dollar.
The CLARITY Act, formally the Digital Asset Market Clarity Act, would extend Section 311 of the USA Patriot Act to digital assets. That section gives the Treasury tools to identify and impose special measures on foreign institutions laundering money or evading sanctions. Esper said the current framework treats crypto flows as outside the dollar perimeter, a gap that lets North Korea, criminal syndicates, and sanctioned regimes exploit offshore loopholes.
Stablecoins are central to the argument. They already settle billions of dollars daily, rivaling the largest credit-card networks, and most of that value is backed by U.S. Treasuries. Esper said the existing legal structure does not treat those flows as part of the dollar system. The CLARITY Act would close that gap.
He also pointed to China. The country is already investing in state-directed digital payment systems. Esper said inaction would allow Beijing to set the rules for the next financial era. “We have a narrow window to set the terms of the next financial era rather than inherit terms set by our rivals,” he wrote in an opinion piece published this week.
The Senate may vote on the bill in September. No date has been set for a floor vote. Esper argued that passing the act would keep crypto innovation onshore, letting U.S. businesses build the infrastructure in private, American-aligned hands – the same pattern that built the internet.
Michael Saylor, the MicroStrategy executive chairman, said Bitcoin can advance without the CLARITY Act. He still urged the U.S. to establish clearer digital-asset rules. Esper’s conclusion: “The Senate should choose to lead. It should pass the Clarity Act and send it to the president’s desk.”
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