The proposed CLARITY Act, a pivotal piece of legislation aimed at establishing a clear market structure for digital assets, currently hangs in a precarious balance. Despite continued White House optimism, the bill's momentum has stalled, fueled by sharp disagreements within the industry and a pointed rebuke from the administration towards key crypto leaders. The unfolding drama highlights the deep divisions and the urgent need for compromise to secure the future of crypto regulation in the U.S.
White House Urges Compromise Amidst Criticism
The White House remains committed to advancing a crypto market structure bill, with Patrick Witt, Executive Director of the President’s Council of Advisors for Digital Assets, asserting it's a matter of "when, not if." Witt emphasized the necessity of compromise to achieve the 60 Senate votes required, cautioning against letting "perfect be the enemy of the good." However, he didn't shy away from criticizing Coinbase CEO Brian Armstrong's "no bill is better than a bad bill" stance, labeling it a "privilege" stemming from the current pro-crypto administration. Witt warned that a missed opportunity could lead to more "punitive" legislation from a Democratic administration, underscoring the high stakes involved.
Industry Divided on Key Provisions
The industry itself is fragmented regarding the CLARITY Act's current draft. While some prominent figures, like Ripple's Brad Garlinghouse and Securitize's Carlos Domingo, have expressed acceptance of the Senate's proposal, others vehemently oppose specific aspects. Brian Armstrong of Coinbase has been vocal in his opposition to a ban on stablecoin yield, tokenized stocks, and decentralized finance (DeFi) provisions. Adding to the discord, Galaxy's Mike Novogratz pointed to the stablecoin yield issue as a potential deal-breaker, attributing the problem to political maneuvering by banks and lawmakers, which he believes ultimately harms the U.S. consumer.
Fading Optimism for the CLARITY Act's Passage
As the legislative path forward remains unclear, market expectations for the CLARITY Act's passage have begun to wane. Despite initial optimism from figures like SEC Chairman Paul Atkins, the lack of progress on a Senate markup has dampened spirits. Prediction markets reflect this growing uncertainty; Polymarket, which previously gave the bill a 50/50 chance of becoming law in 2026, has seen those odds drop further to 40%. The industry now watches to see if stakeholders can forge a consensus in early 2026 to revive the crucial legislation.
