Bitwise CIO says Clarity Act failure gave crypto ‘better rules faster’

Hougan argues that the market’s response makes more sense when looking at what happened after the legislation stalled. In his view, several compromises included in the bill would have been less favorable to parts of the crypto industry than regulatory actions subsequently taken by federal agencies.

One example is stablecoins. The GENIUS Act prohibits stablecoin issuers from paying interest or yield, but it does not impose the same explicit restriction on rewards offered by intermediaries such as exchanges. The Clarity Act negotiations had sought to address that gap amid concerns from banks over competition for deposits.

Hougan argued that the bill’s failure therefore benefits platforms such as Coinbase that use stablecoin rewards to attract customers.

He also sees established crypto exchanges as potential beneficiaries. The Clarity Act was designed to create a more comprehensive federal market structure for digital assets, which could have reduced some of the regulatory barriers facing new competitors.

With the legislation stalled, Hougan argues incumbents retain advantages built through their existing state licenses and infrastructure. Tokenization is another area where he says regulators have moved faster than Congress would have.