Bitwise CIO Warns: Crypto Faces a 3-Year Test if Clarity Act Fails

The Clarity Act was authorised by the US House in July 2025 with help from each events. As of January 2026, the laws stays beneath evaluation within the Senate. The invoice is being thought of by the Senate Committee on Banking, Housing, and Urban Affairs, whereas the Senate Agriculture Committee is offering enter on CFTC-related provisions.

Senate committees have held hearings and launched draft proposals as a part of wider market construction laws. However, markups have been delayed as lawmakers debate points, together with investor safeguards. Differences between Senate drafts and the House-passed invoice are nonetheless being labored by means of.

Bitwise Chief Investment Officer Matt Hougan stated that if the Clarity Act doesn’t cross, the US crypto market would enter what he described as a crucial “present me” interval, throughout which the trade would have roughly three years to show that crypto is indispensable to on a regular basis Americans and to the normal monetary system.

Regulatory Limbo Concerns

According to Hougan, if the invoice doesn’t cross, the present pro-crypto regulatory surroundings wouldn’t be cemented into regulation, leaving it weak to reversal by a future administration. He argued that with out legislative readability, crypto’s future progress would rely much less on coverage expectations and extra on demonstrable real-world adoption. Hougan stated this is able to place stress on the trade to indicate that use circumstances resembling stablecoins, tokenized securities, and blockchain-based monetary infrastructure are being actively adopted at scale.

He in contrast this situation to the early years of firms like Uber and Airbnb, which operated in regulatory grey areas however finally grew to become so broadly used that lawmakers had been compelled to adapt laws to replicate their realities. The Bitwise exec stated that crypto would wish to observe a related path if Clarity fails.

However, Hougan warned that the end result wouldn’t be assured. If, after a number of years, crypto remains to be perceived as working on the fringes of the monetary system, a change in political management may lead to severe challenges. In that case, buyers would await clear proof of real-world adoption earlier than rewarding costs. He stated this contrasts with a situation the place the Clarity Act passes in a type the trade helps, which he expects would result in a sharp market rally as buyers assume the expansion of stablecoins, tokenization, and different crypto use circumstances is locked in.

Friction Within The Industry

While lawmakers proceed to debate the Clarity Act’s ultimate type, there have been studies of rising public friction throughout the trade. Earlier this month, Citron Research accused Coinbase CEO Brian Armstrong of opposing the act to guard Coinbase’s stablecoin yield enterprise from elevated competitors.

The allegations emerged after Coinbase determined to withdraw help for the invoice on January 14. The trade had cited issues over tokenized equities, DeFi privateness, stablecoin rewards, and the shifting of regulatory authority towards the SEC. Citron claimed that Armstrong feared competitors from corporations like Securitize.

The submit Bitwise CIO Warns: Crypto Faces a 3-Year Test if Clarity Act Fails appeared first on CryptoPotato.