"Better that the CLARITY Act was delayed… Passing the current version would have been a negative"

With the CLARITY Act—a market-structure bill for the crypto-asset (cryptocurrency) market—failing to make progress in the U.S. Congress, some have argued that the outcome is in fact positive for the broader crypto market and industry.

According to Cointelegraph on the 19th (local time), market analyst Michaël van de Poppe said of the halted CLARITY Act discussions that “had the current draft passed as-is, it would have had a very negative impact on the market overall.” He cited Coinbase’s recent withdrawal of support for the bill and concerns raised by Coinbase CEO Brian Armstrong.

Armstrong recently pointed out that the draft bill effectively bans tokenized stocks, allows government access to user records on decentralized finance (DeFi) platforms, and bans interest- and yield-bearing stablecoins. Van de Poppe said “these provisions could distort market structure,” adding that “in that sense, it is rather a constructive phase, as all stakeholders have been brought back to the negotiating table.”

He likened the situation to the European Union’s (EU) crypto regulatory regime, MiCA (Markets in Crypto-Assets), which went through multiple rounds of negotiation and revisions before the final text was produced—suggesting the CLARITY Act is likely to follow a similar path. Van de Poppe added that “even if it takes time, it’s important that a more balanced regulatory framework emerges.”

Meanwhile, interpretations diverge over the political tensions surrounding the CLARITY Act. Some have suggested the White House could withdraw its backing in response to Coinbase pulling its support, but Armstrong denied this, saying, “The White House has been very constructive throughout the negotiations.” He emphasized that talks are continuing on revisions that could satisfy both the crypto industry and regional banks.