Key insights
- The CLARITY Act, a US congressional bill for crypto regulation, faces a low probability of passing before the summer recess due to significant disconnects between political parties. Despite this potential setback, industry experts suggest it's not a critical blow to the crypto industry, which has grown substantially without explicit market structure legislation. Positive regulatory momentum exists through other avenues, such as SEC initiatives and stablecoin legislation, indicating that the US crypto market can still advance. However, there's a recognized risk that a lack of clear legislation could lead to crypto hubs shifting away from the US.
In bitcoin's (BTC-USD) latest slump, the cryptocurrency has sunk below $60,000 on Friday. The CLARITY Act — the Congressional bill for crypto regulation — currently sits on the Senate's schedule for a possible vote before lawmakers' summer recess.
Bitwise head of research Ryan Rasmussen sits down with Josh Lipton to explain why he believes the CLARITY Act may not get passed in 2026, underlining that that shouldn't stop the momentum of the crypto industry.
We think the clarity Act has a very low likelihood of passing right now. It's sitting with the Senate and there's of course not that much time left before the summer recess and then the midterms. Well we're hearing from insiders both in the Republican and the Democrat side is that there's still a lot of disconnect between where this thing needs to go for it to be passed and the time we have left. So our view is clarity act is very unlikely to pass this year, but I think that's okay. Crypto's grown into a multi-trillion dollar industry without clear market structure legislation, and we have a lot of positive regulatory momentum without the clarity Act.
The SEC is extremely pro crypto. Paul Atkins and his team are focused on bringing financial markets onto blockchain rails. Stable coins just had a strong piece of legislation passed last year that supports the growth and the regulation around payment stable coins. So things can still move forward without clarity. It's a short-term setback and investors are definitely thinking about it, we're being asked about it, but we don't think it's the end all be all for crypto.
If you don't have that clarity act though, Ryan, I'm just curious, are there are there potential sort of domino effects geopolitically? Like would that mean, okay, the hub for for crypto is not going to be the US, it's going to be someplace else?
I think that's certainly a risk and why you have President Trump and his administration talking about we need pro crypto market structure legislation to passed in the US, but I don't think it means everything moves offshore immediately. I think the SEC and the CFTC and other regulators will create these innovation sandboxes they've been talking about, which will allow entrepreneurs and existing companies to really experiment in the space without this fear of regulatory enforcement. And that's what you need in order for capital to come into things like stable coins and things like tokenization. We're already seeing it happen without this market structure legislation. The New York Stock Exchange, the Nasdaq, Visa, MasterCard, these companies are investing heavily into stable coins and tokenization before we have market structure legislation. So passing it would accelerate that, but it's failure to pass won't stop that in its track.