Crypto's Clarity Act Fails Senate Vote, Delays Mainstream Push

Crypto's push into mainstream finance suffered a setback when the Senate failed to advance the Clarity Act on September 15. The Bill, which aimed to provide clearer understanding of legal parameters governing the industry and a well-defined pathway for companies deciding whether to invest, expand or strike deals in the US, denied the industry a chance to turn its newfound influence in Washington into fresh rules that could outlast the current administration.

Crypto exchange Coinbase Global Inc closed 10 per cent lower, while stablecoin issuer Circle Internet Group Inc declined more than 11 per cent. Bitcoin, the largest cryptocurrency, dropped as much as 5.3 per cent to below US$75,000 after the Bill failed in a procedural vote.

Austin Campbell, a crypto expert and former banker who is now an adjunct professor at the NYU Stern School of Business in New York, said 'The failure puts the ball in the hands of the regulators.' He added that while they can make rules, those are less stable and permanent than legislation. Crypto had been on a winning streak in Washington, but this setback could prolong its bear market.

For Wall Street firms already deep in crypto, little changes immediately, according to BlackRock's head of digital assets, Robbie Mitchnick. However, the industry uncertainty is greater for investments that have not been made yet, from acquisitions to new businesses and US expansion.