Consider what being outside the banking system costs. Imagine a home health aide in rural Somerset County. She cashes her paycheck at a storefront that takes 3% off the top, buys a money order to pay rent because she has no checking account and sends money to her mother in Guatemala at a fee that runs above 6% and takes four days to arrive. Nothing about that sequence is unusual. It is the ordinary arithmetic of financial exclusion in the richest country on Earth.
The numbers are not small. The FDIC counts 5.6 million American households as unbanked, including 10.6% of Black households and 9.5% of Hispanic households. Another 19 million households hold an account but still pay nonbank providers to meet basic needs. More than 12 million Americans live in banking deserts, most of them rural. This lack of access affects families in places such as the Eastern Shore and Western Maryland, where full-service branches can be hard to reach. A third of unbanked adults rely on check cashers and money orders. Americans give billions a year to remittance companies for transfers that a functioning system would price near zero.
The technology that could serve these households already exists, and it does not require a branch. A smartphone and an internet connection are enough to hold dollars, receive wages, buy groceries and send money across a border for a fraction of a cent. The Federal Reserve found in 2023 that Black and Hispanic adults use digital asset tools at higher rates than any other demographic group. That is not a marketing claim. It is people routing around the existing system that has priced them out.
What is missing is not the technology. It is the rulebook. This is the opportunity the proposed CLARITY Act in Congress provides — modernized regulation that will enable access to financial services for the unbanked and unbrokered families of our nation.
Right now, Americans who open a digital wallet face a patchwork of state regulations that are outdated for modern, quickly evolving technology. Consumers in 48 states lack the baseline safeguards that the CLARITY Act would establish. Anyone who watched FTX collapse knows what happens when customer money and company money sit in one account.
CLARITY writes that accountability into statute. Platforms must segregate customer assets from their own, under qualified custody, so that a bankruptcy does not become a claim against a customer’s savings. Exchanges are barred from trading against their own users. Listing a token requires continuous, audited disclosure of who controls the supply and how the asset actually works.
The largest prize is ownership through access to wealth creation. Over the last four decades, American labor income grew 57% while capital income grew 136%, and the households on the wrong side of that gap are not there by choice. Ninety-six percent of top-decile households own stock. Only 17% of bottom-quintile households do. Minimum balances, onboarding paperwork and fixed costs make small, frequent investing uneconomic for exactly the people who most need to convert wages into assets. For Maryland nurses, aides, teachers and service workers, that can mean the difference between investing a small amount from each paycheck and staying locked out of wealth-building opportunities entirely. Tokenized equities and funds change that arithmetic, making fractional ownership viable at the cost of a phone top-up and cutting transaction costs by more than 30%. That is how a working household starts benefiting from compounding.
Baltimore offers a concrete example of how blockchain technology can extend beyond financial markets. The city is piloting a blockchain project for its roughly 14,000 vacant properties, creating a secure, searchable record of ownership that can reduce titling costs and move homes into redevelopment and productive use.
This bill is truly bipartisan — drafted by both Democrats and Republicans. Senate negotiators closed the loophole that let FTX count its own token as capital. They wrote a dedicated insider trading prohibition regime for crypto insiders. They established that a tokenized security is still a security, so investor protections travel with the asset rather than evaporating on contact with a blockchain. They preserved the Consumer Financial Protection Bureau, the Federal Trade Commission and state attorney general authority, along with existing private fraud claims. They required the CFTC to examine who is actually participating in these markets and to design consumer protections accordingly. All House Republicans and 78 House Democrats voted for this bill.
The Senate must complete its work and pass CLARITY. Digital wallets and tokenized funds are in use today, under a patchwork of state rules or under nothing at all. A no vote does not stop them. It only extends the time in which the households with the least margin for error carry the most risk and pay higher costs. Improving access to financial services by providing rules for digital finance is within reach.
Michael Faulkender is the William Longbrake Professor of Finance at the University of Maryland. He served as deputy U.S. Treasury secretary in 2025.
