Crypto Gains in Washington Despite Clarity Act Failure

Kristin Smith, president of the Solana Policy Institute and interim CEO of the Blockchain Association, argues that the crypto industry is making strides in Washington despite the failure of the Clarity Act. She believes that if federal regulators finalize rules before summer 2028, those regulations will be harder to reverse.

The Clarity Act, which aimed to establish federal market rules for digital assets, did not pass the Senate. However, Smith points out that agency rules are easier to reverse than laws, making timing crucial. She highlights recent wins for the industry, including the passage of the Genius Act and a change to an Internal Revenue Service (IRS) broker rule.

Smith told Bloomberg that the legislative fight provided regulators with political cover to act. Meanwhile, the Commodity Futures Trading Commission (CFTC) opened public comments on leveraged retail crypto trading rules. She estimates that rulemaking at the Securities and Exchange Commission (SEC) and the CFTC could take 18 to 24 months.

Smith sees two main hurdles for a bigger crypto bill: the president’s family crypto business and banks not fully on board. She believes traditional finance and overseas firms would build on finished rules, making them harder to undo. However, Bitwise Chief Investment Officer Matt Hougan notes that a new administration could reverse agency rules starting in January 2029, leaving crypto’s regulatory future in the hands of two agencies racing against a tight deadline.