Crypto Industry Wins 'Better Rules, Faster' with Clarity Act Failure

Bitwise CIO Matt Hougan believes the failure of the Clarity Act in the Senate has given the crypto market 'better rules faster'. In his latest weekly memo, Hougan pointed out that Bitcoin gained around 8% and Ether 7% since the September 15 vote. The bill's demise saw tokens like $NEAR, Uniswap, and Avalanche surge substantially more.

Hougan argues that the market's response makes sense when looking at what happened after the legislation stalled. He believes several compromises in the bill would have been less favorable to parts of the crypto industry than regulatory actions taken by federal agencies. For instance, the GENIUS Act prohibits stablecoin issuers from paying interest or yield, but does not impose the same restriction on rewards offered by intermediaries like exchanges.

The Clarity Act negotiations had sought to address the gap amid concerns from banks over competition for deposits. Hougan sees established crypto exchanges and platforms like Coinbase as potential beneficiaries of the bill's failure. With the legislation stalled, incumbents retain advantages built through their existing state licenses and infrastructure.