Crypto Rallies as CLARITY Act Fails in Senate, Industry May Be Better Off Without It

Crypto assets, including Bitcoin and Ethereum, surged after the failure of the US CLARITY Act in the Senate. The act's demise was unexpected, as the crypto industry had strongly supported the bill, seeking legal certainty. However, the final version included compromises that could have created new restrictions for crypto companies.

According to Bitwise Chief Investment Officer Matt Hougan, the industry may have benefited from the bill's failure. Hougan pointed out that the proposed legislation would have restricted platforms from paying customers interest or rewards on stablecoin balances, which could have harmed companies like Coinbase. The bill also proposed a national licensing system for spot crypto exchanges and placed limits on the way exchanges combine trading and brokerage services.

With the bill gone, established exchanges avoid those changes for now. Hougan also noted that the SEC recently allowed certain tokenized US stocks to trade through blockchain-based systems under temporary rules, giving tokenization companies a chance to test the technology in real markets sooner.

Several tokens, including NEAR and Uniswap, have gained strongly while using protocol revenue for token buybacks. The SEC has also clarified that, once a blockchain network is functional, announcing a buyback program does not by itself turn a token into a security.