U.S. Treasury Secretary Scott Bessent expressed optimism that the proposed Clarity Act, aimed at establishing a regulatory framework for the cryptocurrency market, could stabilize the ongoing volatility affecting Bitcoin and other digital assets. Bessent emphasized that the current turmoil in the crypto market is largely self-inflicted, triggered by opposition from notable firms, including Coinbase, against certain provisions of the bill.
The market has seen significant declines, with Bitcoin plummeting over 29% in the past month, alongside substantial drops in Ethereum and other cryptocurrencies. Bessent argued that timely passage of the Clarity Act, which he describes as essential for offering much-needed structure and clarity to the sector, would bring comfort and stability to the markets. “I think it’s important to get this Clarity bill done as soon as possible and on the president’s desk this spring,” he stated during an interview.
Despite this hopeful outlook, Bessent pointed out the internal divisions within the cryptocurrency community regarding support for the Clarity Act. He highlighted that while some Democrats are eager to collaborate with Republicans to advance the legislation, resistance from certain crypto companies has hindered progress. “There are a group of crypto firms who have been blocking it… that doesn’t seem to have been good for the overall crypto community,” he remarked. His comments are a departure from his more severe critiques of these firms; he notably referred to them as “nihilists” in previous statements and suggested that they consider relocating to countries with more permissive regulations, such as El Salvador.
Coinbase, one of the largest American cryptocurrency exchanges, has withdrawn its support for the bill, primarily due to a provision that would restrict firms from offering interest or yield on stablecoin deposits. CEO Brian Armstrong has publicly stated that the company prefers the absence of legislation over what they consider a detrimental bill.
The future of the Clarity Act remains uncertain, especially with the approaching midterm elections. Bessent warned that if Democrats were to gain a majority in the House of Representatives, the likelihood of finalizing a deal on the legislation could diminish significantly. He reflected on the regulatory challenges faced by the crypto industry under the Biden administration, recalling it as a near “extinction event.”
Currently, prediction markets, such as Polymarket, estimate a 62% probability that the Clarity Act will be enacted by the end of 2026, suggesting a mixed outlook among investors and market participants regarding the bill’s eventual fate and its potential impact on the cryptocurrency landscape.
