CLARITY Act's Passage Looks Unlikely This Year, Warns Grayscale Research Head

Grayscale's Head of Research Zach Pandl has expressed concerns that the CLARITY Act, a major piece of crypto market structure legislation, may not pass this year due to a crowded Senate calendar and election-year politics.

The bill aims to clarify jurisdiction between the SEC and CFTC and provide a clearer path for crypto exchanges, token issuers, and DeFi protocols to operate onshore. However, without it, Pandl warns that new investment, developer activity, and tokenized real-world asset markets may migrate offshore in 2026-2027.

Pandl notes that agency rulemaking and piecemeal milestones, such as the first live tokenized Treasury settlement, can sustain momentum but cannot substitute for a comprehensive market structure bill. He argues that existing assets like Bitcoin and stablecoin payments can continue to grow without the bill, but the absence of a unified U.S. framework opens up opportunities for competitors abroad.

The election-year calculus is significant as it resets expectations about timing, with bills often sliding past the finish line into the next Congress. For crypto firms weighing location decisions, this timeline is longer than many can afford, and the pivot point is not just about where headquarters sit but also where liquidity pools, developer tooling, and institutional custody infrastructure get built.