Former Defense Secretary Esper Calls CLARITY Act a National Security Bill Ahead of Sept. 15 Vote

Former U.S. Defense Secretary Mark Esper has urged the Senate to pass the CLARITY Act before its Sept. 15 procedural vote, arguing in a policy essay that delayed crypto rules could weaken American financial oversight and hand strategic ground to China.

In an argument published by the Financial Times on Aug. 7, Esper described the Digital Asset Market Clarity Act as “not merely a financial services bill” but also a “national security bill” — a framing that reframes the crypto market-structure fight as a matter of defense and foreign policy rather than consumer finance alone.

Esper, who led the Pentagon from 2019 to 2020, argued that U.S. power rests partly on the dollar and the payment networks that carry it around the world. Clear rules for digital assets, in his view, would help preserve Washington’s visibility into global financial activity while strengthening sanctions enforcement.

The sanctions argument

Esper’s case rests on a simple premise: American authorities can monitor and restrict transactions that flow through banks and payment networks subject to U.S. law. That gives Washington tools to enforce sanctions and investigate illicit finance. But when crypto companies and transactions migrate to offshore venues with weaker controls, U.S. agencies lose some of their ability to follow the funds and act against illicit networks.

He cited threats from sanctioned networks and North Korean cyber groups, noting that state-sponsored actors like the Lazarus Group have been linked to major digital asset thefts, including the roughly 625 million USD attack on the Ronin network in 2022. A U.S.-regulated market, Esper argued, would give law enforcement more reliable access to transaction and customer records than a fragmented offshore industry ever could.

Esper also warned that congressional delays give China more time to build payment systems outside U.S. influence. If other countries set digital asset standards first, Washington’s leverage over future payment networks — and the financial surveillance capabilities that come with it — would erode.

Esper currently serves on Coinbase’s Global Advisory Council, which advises the exchange’s leadership on policy and strategic matters, and Coinbase Chief Policy Officer Faryar Shirzad shared the essay on X. The former defense secretary’s financial ties to the industry may draw skepticism from critics, but his argument aligns with positions already taken inside the Senate.

What the bill would actually do

The CLARITY Act would divide responsibility for digital assets between the Commodity Futures Trading Commission and the Securities and Exchange Commission. Qualifying digital commodities would generally come under CFTC oversight, while the SEC would retain authority over tokens and transactions treated as securities.

For U.S. investors, that division could determine which agency supervises trading platforms, brokers, and other intermediaries, and it could create federal registration standards for parts of the spot crypto market that currently escape routine supervision.

Parts of the Senate proposal already address the security concerns Esper raised. A merged draft released in July contains an illicit-finance title covering foreign adversary activity, law enforcement training, and international cooperation. Section 10303 would expand the Treasury Department’s special-measures authority under Section 311 of the USA PATRIOT Act, letting Treasury prohibit or condition certain digital asset transfers linked to foreign jurisdictions, institutions, or transaction classes found to present a primary money-laundering concern.

Senate Banking Committee Chair Tim Scott has likewise argued the legislation would make it harder for criminals and foreign adversaries to misuse the U.S. financial system. Esper’s contribution is to place those same provisions inside a defense framework.

The 60-vote test

The procedural math remains the bill’s biggest obstacle. Senate Majority Leader John Thune filed cloture on the motion to proceed to the bill before lawmakers left Washington for the August recess, and the vote is scheduled for Sept. 15, after senators return.

Cloture requires 60 votes. Republicans cannot reach that threshold alone, leaving the bill dependent on Democratic support that has remained elusive throughout negotiations. A successful vote would not send the legislation to the president — it would only allow the Senate to begin formal consideration, with debate and amendments to follow before any final passage vote.

The House approved the bill by a 294–134 vote in July 2025, and the Senate Banking Committee later advanced its market-structure text by 15–9, with two Democrats joining Republicans. Any Senate text that differs from the House version would need additional action — either a return to the House floor or a conference committee — before reaching the White House.

Security framing does not settle the disputes

National security arguments have not resolved the disagreements holding the bill up. Lawmakers and industry groups remain divided over stablecoin rewards programs, the treatment of decentralized finance, and political ethics provisions that gained prominence after elected officials promoted their own token projects.

What Esper’s essay does signal is that the coalition pressing for passage is broadening beyond crypto companies and financial services lobbyists. Whether a former Pentagon chief’s warning about Chinese payment infrastructure can move Senate Democrats before Sept. 15 is the question the next three weeks will answer.