Bitwise CIO Says Clarity Act Collapse Could Bring Faster, Better Crypto Regulation

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Matt Hougan, chief investment officer at crypto asset manager Bitwise, said the collapse of the Clarity Act could leave the industry with a more favorable regulatory environment in the short term rather than long-term legislative certainty.

Crypto Briefing reported on October 30 that Hougan said the crypto market rose after the Clarity Act failed. He said that move reflected expectations that the industry could get a friendlier regulatory backdrop in the near term instead of waiting for long-term certainty through legislation.

Some compromises in the bill may have been less favorable to parts of the crypto industry than measures later taken by federal regulators, Hougan said. He also said negotiations over the bill included discussions aimed at closing regulatory gaps around stablecoin rewards, amid banks' concerns about competition for deposits.

Hougan said the bill's failure could ultimately benefit platforms such as Coinbase that use stablecoin rewards to attract customers.

He added that the Clarity Act had sought to establish a comprehensive federal market structure for digital assets. If passed, the bill could have lowered some regulatory barriers for new entrants while creating new burdens for existing firms.