Despite the CLARITY Act's failure in Congress, crypto industry leaders like Matt Hougan of Bitwise argue that progress will continue. Regulatory guidance from SEC and CFTC could fill regulatory gaps.
In a recent blog post, Bitwise chief investment officer Matt Hougan argued that even if the CLARITY Act fails to pass this year, crypto's momentum is too strong for it to 'go back in the bottle.' The Senate faces an Aug. 5 deadline to advance the landmark crypto market structure bill before its summer recess.
Market observers are increasingly pessimistic about the CLARITY Act’s passage; Galaxy Research lowered its probability of the bill passing this year to just 30%, while Polymarket currently shows a 23% chance, down from an initial 82% in February. NYDIG head of research Greg Cipolaro stated that the latest draft lacks sufficient bipartisan support.
Hougan acknowledged that without progress on a White House ethics deal and movement on illicit finance and stablecoin yield issues, Senate Democrats will likely deny cloture for the crypto bill. However, he expressed hope that it could pass in September or during December’s lame duck session as part of an omnibus package.
While lacking legislation, regulatory guidance from the SEC-CFTC's joint interpretation issued in March would continue to classify Bitcoin and other assets as digital commodities. SEC Chair Paul Atkins stated his agency is ready to issue rules addressing crypto market issues, but they are not as durable or future-proofed without comprehensive legislation.
Without CLARITY Act passage, Hougan emphasized that the industry will still have two and a half years before potential changes under a new administration could impact it. He concluded by stating, 'Crypto has enough momentum to reshape finance for decades regardless of what happens in the next few days.'
Traders should monitor regulatory developments closely as they can significantly affect market dynamics. The absence of clear legislation may lead to increased legal challenges and uncertainty, impacting investor confidence.
Source: Cointelegraph. Summarized and rewritten by the Vexoda Newsroom. This is market news, not financial advice.