Key highlights:
Bitwise CIO Matt Hougan believes that the crypto industry may not have suffered as much as expected following the failure of the CLARITY Act to pass the US Senate. In fact, he argues that the crypto bill’s collapse has turned out to be beneficial for several parts of the industry. While stablecoins, exchanges, tokenized platforms, and buyback tokens emerge as key beneficiaries, crypto companies are now looking for a more favorable regulatory environment in the near future.
CLARITY Act failure did not impact the crypto industry much, says Bitwise CIO
Matt Hougan remains optimistic about the future of the crypto industry even though the CLARITY Act remains stalled. He believes that the crypto bill’s failure to pass Congress will provide regulators more room to introduce comprehensive rules to the industry, which could significantly benefit crypto companies.
Notably, the Bitwise CIO highlighted the crypto market’s reaction to the CLARITY Act’s failure to progress. Despite this development, which was expected to affect the market severely, crypto prices didn’t slide; instead, they moved higher soon. According to him, this positive reaction is driven by the expectation that the regulators would soon launch new clear rules.
As CoinCodex reported, both the SEC and CFTC have already taken initiatives to introduce new rules into the industry. For example, the SEC has already unveiled plans to launch new regulations, focusing on investment contracts. The SEC has also opened a five-year pathway for 24-hour trading of tokenized stocks. Meanwhile, the CFTC is also making efforts to bring the much-needed clarity to the crypto industry, as noted by Chair Michael Selig. Thus, the agencies are moving forward with their regulatory efforts instead of waiting for Congress to act.
Who benefits from the crypto bill failure?
Further, the Bitwise CIO elaborated on the benefits of the CLARITY Act failure. According to him, four parts of the crypto industry have benefited from the move. These include stablecoins, crypto exchanges, tokenization firms, and buyback-focused tokens.
How will stablecoin platforms benefit?
As noted by Hougan, stablecoin platforms could significantly benefit from the CLARITY Act’s failure, as the bill could have restricted platforms offering yield on stablecoin holdings. As the GENIUS Act restricts stablecoin issuers from paying interest, the platforms have more room to offer rewards. The Bitwise CIO sees Coinbase as the biggest beneficiary here.
Crypto exchanges stay on the advantage list
In addition to stablecoin platforms, established crypto exchanges like Coinbase and Kraken are also winners. This is mainly because the CLARITY Act would have introduced a national spot-market license. With this license, traditional financial firms could easily enter the crypto market. The bill would have also limited how firms combine exchange and broker services. Hougan added:
“Clarity would have limited exchanges’ ability to bridge these two services, raising costs. That’s now off the table. Advantage: exchanges.”
Tokenization firms to get clarity faster
Tokenization firms also could benefit from the stalled CLARITY Act as they may get faster regulatory clarity without waiting for the crypto bill. Hougan pointed to the SEC’s regulatory move on tokenized stocks. One of the firms mentioned by Hougan was Securitize, the tokenization platform that supports BlackRock’s BUIDL.
This is how token buyback programs benefit
The fourth winner is the tokens linked to buyback programs. The SEC’s recent guidance indicated that announcing a buyback on a functional blockchain does not make the token a security. Here, NEAR Protocol is the main beneficiary.
Source:: Why Bitwise’s Matt Hougan Says Clarity Act Failure Could Help Crypto