The huge trigger the US Clarity Act could pull [Hankyung Koala]

Kim Min-seung’s ₿-ficial

"Trillions of dollars are waiting on the sidelines."

This remark, delivered earlier this month by Patrick Witt, executive director of the White House Digital Assets Advisory Council, in an interview with Yahoo Finance, encapsulates a major omen for the market. He said he is confident that if the Clarity Act—legislation on digital-asset market structure now being discussed in the US Congress—is signed, institutional capital that has stayed out of the market due to regulatory uncertainty will begin to flow in in earnest. His insight that "regulation is the unlock mechanism" suggests the bill is not merely a policy document but a decisive key that could set off a massive reallocation of capital worth tens of trillions of dollars.

A scenario in which the Clarity Act passes the US Congress and is enacted is increasingly coming into view. What matters is that the bill did not emerge in a vacuum. Even before it, major US financial regulators had already been moving quietly and quickly. The changes over the past year have been dramatic. In January last year, the US Securities and Exchange Commission (SEC) replaced SAB 121 with SAB 122, scrapping the toxic provision that required banks to record crypto assets held in custody as liabilities.

Then in March the same year, the Office of the Comptroller of the Currency (OCC) allowed crypto services without prior approval, and the Federal Deposit Insurance Corporation (FDIC) removed the prior-notice requirement. The Federal Reserve (Fed) withdrew pressure-style supervisory letters, and the Department of Justice abandoned the approach of "regulation by prosecution" and dissolved the National Cryptocurrency Enforcement Team (NCET).

The SEC then defined stablecoins and bitcoin, among others, as non-securities in sequence, and in December approved national trust bank charters for major digital-asset companies—marking the peak of this trend.

To borrow a Cold War analogy, these steps were like removing landmines one by one along the border. Of course, clearing mines does not immediately create private-sector exchange. A formal declaration of liberalization must follow—and the Clarity Act plays exactly that role. If US regulators have left the door open for institutions to enter, the Clarity Act would carry an impact akin to South Korea’s 1989 liberalization of overseas travel. When the possibility of "you can go" combines with the legal right that "you may come and go freely," tens of trillions of dollars previously constrained by custody obligations will finally begin to move.

After the Clarity Act is signed, the channels through which regulated capital is expected to flow into the crypto market broadly fall into three categories. The first gateway is stablecoins. If global megabanks ramp up stablecoin issuance in earnest, supply will rise sharply, and capital chasing yield will naturally flow into tokenized real-world assets (RWA) markets and crypto assets such as bitcoin. In particular, once legal clarity is secured, growth in security tokens will accelerate, along with tokenization of real estate and private equity. The moment long-standing classification uncertainty is resolved, the tokenization of private companies’ shares and global equities will inevitably move onto a full-fledged trajectory.

Capital seeking higher growth will head toward bitcoin and ether. The logic for institutions adding bitcoin to portfolios is not short-term price stability, but low correlation with traditional assets and long-term upside potential. Historically, increases in stablecoin supply have been a leading indicator for rises in crypto-asset prices, and the scale of stablecoins issued by global banks will become a qualitatively different "loaded gun," expanding the entire market’s pie.

The second channel is direct investment via exchange-traded funds (ETFs). Spot bitcoin ETFs have already amassed substantial assets, but this is merely early capital that entered while accepting regulatory risk. Once legal clarity is locked in, insurers, pension funds, and sovereign wealth funds that hesitated due to custody obligations will gain a solid basis to enter the market in force. The market expects assets under management in bitcoin ETFs to reach as much as $220 billion after regulatory stabilization.

The final channel is the expansion of crypto products by traditional finance (TradFi). Services being prepared by major investment banks will broaden dramatically as the legal basis is established. In particular, bitcoin-collateralized lending and payment services will become powerful new profit engines for regulated finance.

This wave of change is already being detected globally. The fact that Japan’s Government Pension Investment Fund (GPIF), the world’s largest pension fund, has begun considering bitcoin as a portfolio diversification target is highly symbolic. The footsteps of a giant that manages $1.5 trillion are virtually an implicit signal to every institutional investor worldwide that "it’s OK to go in now." The US Clarity Act will be the final trigger that knocks over this massive domino.

Explosive growth in on-chain finance is no longer a hypothesis but an imminent reality. On overseas decentralized exchanges, stock futures linked to our companies are already trading 24/7 with leverage. An era has arrived in which AI agents are equipped with stablecoin wallets and conduct economic activity. As the US declares digital hegemony and global banks rush on-chain, where do we stand? The on-chain finance revolution will not wait for our hesitation. If we do not want to remain spectators, it is time to truly hurry.

Kim Min-seung, head of Korbit Research Center, is...

He is a founding member and the head of Korbit Research Center. He explains complex events and concepts unfolding across the blockchain and virtual-asset ecosystem in an accessible way and works to help people with different perspectives understand one another. His experience includes blockchain project strategy planning and software development.