NASAA Urges No Vote on CLARITY Act, Demands Critical Revisions

The North American Securities Administrators Association sent a letter to the Senate Banking Committee urging members to vote against the CLARITY Act unless the bill is revised, directly ahead of the committee’s markup hearing this Thursday. The state regulators’ group called the changes “mission-critical” and warned the current text would create enforcement gaps and undermine state authority over tokenized securities.

The Stalled Path of the CLARITY Act

The CLARITY Act cleared the House in 2025 but has been mired in the Senate throughout 2026. The legislation aims to define regulatory treatment of digital assets and tokenized securities – a framework that directly affects firms building infrastructure around on-chain equities and fixed income. The bill’s progress has drawn multiple comment letters from industry and regulatory bodies, and the markup session scheduled for this week represents the first concrete opportunity for amendments since the bill reached the Senate floor.

NASAA has consistently opposed any federal legislation that dilutes state-level enforcement. The group represents all US state securities regulators, plus counterparts in Canada and Mexico. Its objection is not a blanket rejection of the bill but a demand for precise revisions that preserve what NASAA calls “regulatory parity” between federal and state oversight of tokenized assets.

Parity and Enforcement: The Three Red Lines NASAA Draws

The letter identifies three specific areas where NASAA wants language rewritten before it can support the bill.

State anti-fraud and investigative authority is the first. NASAA argues that bad actors could exploit “selective text” in the current draft to argue that tokenized securities fall outside state jurisdiction, creating enforcement gaps. The group insists that any federal framework must explicitly preserve states’ ability to pursue fraud and conduct investigations at the same level they apply to traditional securities.

Licensing and registration powers over broker-dealers, investment advisers, and similar intermediaries is the second. NASAA views these authorities as foundational to investor protection. The current language, it says, could be interpreted as preempting state licensing regimes, leading to “years of costly litigation” unless Congress inserts “a few short drafting adjustments.” The group wants clarity that the bill does not alter the existing federalism balance that lets states register and oversee local market participants.

Overbroad exemptive authority granted to federal regulators, particularly the Securities and Exchange Commission, is the third concern. NASAA contends the bill would allow the SEC to carve out large swaths of activity from state oversight without clear limits, effectively centralising power that has historically been shared.

These objections are consistent with NASAA’s long-standing posture. The group has repeatedly pushed back on any federal crypto legislation that it sees as an infringement on state regulatory powers. Here, NASAA is telling the committee that the bill is fixable – but only if lawmakers accept specific drafting changes before a committee vote.

Thursday’s Markup: What Changes Would Mean for Tokenized Securities

The markup hearing becomes a binary catalyst for the tokenized securities market and the broader digital-asset regulatory framework. During markup, committee members can propose and vote on amendments. If senators sympathetic to NASAA’s position – or those already uneasy about the bill’s compromise language – push for revisions, the text could change in ways that either satisfy state regulators or fracture the existing coalition that carried the House vote.

For asset managers and platforms building tokenized products, the stakes are immediate. Earlier this year, Payward and Franklin Templeton placed a joint bet on tokenized securities approval, while another institutional push saw JPMorgan target stablecoin issuers under the GENIUS Act. Any delay or substantial rewrite of the CLARITY Act would push back the regulatory clarity those businesses require. A markup that produces an amended bill without resolving NASAA’s core demands would extend the legislative morass and leave state-level enforcement ambiguity intact.

The letter explicitly says NASAA is “committed to working constructively with Congress” but will urge a NO vote unless the issues are resolved. The language puts pressure on committee members to either accept NASAA’s red lines or risk losing a significant voice in state-level investor protection.

The immediate next decision point arrives this Thursday. The committee’s handling of the parity, enforcement-gap, and exemptive-authority provisions will determine whether the CLARITY Act regains momentum or stalls further, directly affecting the near-term path for tokenized asset markets and the crypto platforms that depend on a stable national framework.