Responsible DeFi: WisdomTree's Case to Congress for the CLARITY Act

On July 17, Ryan Louvar, WisdomTree's Chief Legal Officer - Digital Assets, testified at a House Financial Services Subcommittee field hearing on digital asset market structure and the CLARITY Act, a bill that could reshape how tokenized investments work in the U.S. Louvar testified alongside other industry voices, in a hearing focused on how blockchain-based products can function within regulated financial markets. The bill remains in active Senate negotiations, with ethics provisions in particular still being worked out, but the core argument Louvar made to Congress stands on its own. Here's his testimony, distilled.

His message is simple: the movement to tokenized markets does not mean, and should not require, diminished investor protections. The United States shouldn't have to choose between innovation and investor protection in digital assets. We should have both.

Here's the case, in four ideas.

Same rules, modern rails

A tokenized security is still a security. Tokenization isn't a new asset class, it's a new way to issue, own, transfer, and settle the same financial products you already know. A tokenized money market fund is still a regulated money market fund. What changes is the technology underneath, not your rights on top of it.

Think of it like the rise of ETFs. ETFs didn't change what stocks or bonds were, they changed the wrapper, making familiar investments easier and cheaper to access. Tokenization works the same way, and the potential upside for investors is real:

“[Blockchain] can improve access, letting more investors reach real asset exposure at lower minimums and with fewer intermediary layers standing between them and the assets they want to own.”

Proof, not theory

WisdomTree isn't just arguing for this, it's already doing it. WisdomTree offers the largest lineup of SEC-registered tokenized funds in the market, spanning money market, equity, fixed income, asset allocation, and alternative strategies. And in February 2026, it became the first firm to receive SEC exemptive relief enabling a registered money market fund to trade 24/7 via a broker-dealer, designed to transact at a stable $1.00 value, and supporting instant settlement for tokenized fund shares for the first time under U.S. law.

That track record depends on structure, not just technology:

“For U.S. regulated tokenized funds, responsible innovation requires preserving the connection between the onchain token, the underlying legal rights, the official books and records, and the investor protections that attach to the regulated fund structure.”

Clarity is a catalyst

We've seen this play out before. Since Congress passed the GENIUS Act to set clear rules for stablecoins, more issuers have entered the U.S. market, and banks, asset managers, and payment networks have engaged more directly, because clear rules gave them the confidence to commit. The CLARITY Act can do the same thing for tokenized investments more broadly:

“The CLARITY Act is an important step toward that goal, and along with the prior passage of the GENIUS Act, will unleash the ability for traditional finance and digital native firms to compete on a level, regulated playing field, providing benefits for investors.”

The stakes are American leadership

The next generation of financial infrastructure will be built somewhere. With clear rules, it gets built here, in the U.S., under U.S. investor protections. Without them, it still gets built, just offshore, outside the reach of U.S. regulators and outside the protections American investors expect.

“We should help build the future of financial infrastructure, not import it.”

The technology should fade into the background

For most investors, this debate was never really about blockchain. It's about whether the investments you already rely on become faster, more accessible, and lower-cost, without losing the protections you already count on. As Ryan Louvar put it in his testimony: the technology should fade into the background. What investors should notice is a better financial experience, not fewer protections.

That's what WisdomTree calls Responsible DeFi: embracing innovation while holding onto transparency, accountability, and real regulatory oversight.

Watch the hearing:

https://www.youtube.com/live/fijdz8IDEDc

Read Ryan Louvar's full written testimony