CLARITY Act's Failure May Spark Faster Regulatory Action
Bernstein analysts have downgraded their predictions for the passage of the CLARITY Act in the Senate, citing a dwindling pulse on Capitol Hill.
The Digital Asset Market Clarity Act, which would give the CFTC oversight of digital commodities and limit the SEC's jurisdiction over certain asset classes, has seen its chances of passing drop to 31% according to prediction-market odds.
Despite this setback, Bernstein suggests that the failure of the CLARITY Act could actually accelerate rulemaking by both the SEC and CFTC through their joint initiative, Project Crypto.
Project Crypto aims to provide regulatory clarity for digital assets by establishing clear definitions for what counts as a security versus a commodity. The program focuses on taxonomy, self-custody interpretations, and possible exemptions to spur innovation in the market.