Bitwise: CLARITY Act delay won't stop crypto growth

The Senate's Aug. 4 floor schedule did not include H.R. 3633, the CLARITY Act. The chamber's official list of pending cloture motions named two unrelated matters. No cloture filing for the CLARITY Act had been announced by the end of Tuesday's session. Bitwise Chief Investment Officer Matt Hougan said the crypto industry would continue expanding even if the Senate fails to advance the bill before its August recess. In an investor memo published Aug. 4, he wrote that crypto "will be fine" without immediate congressional action, pointing to Securities and Exchange Commission rulemaking as an alternative path while traditional financial companies continue adopting digital assets.

Hougan identified Wednesday, Aug. 5, as the practical deadline for Senate leaders to file cloture and preserve a possible Friday procedural vote. Senate Rule XXII ordinarily requires a cloture vote one hour after the chamber meets on the second calendar day after a motion is filed. Sixteen senators must sign it. Ending debate normally requires three-fifths of senators duly chosen and sworn, or 60 votes when every seat is filled. The measure could move faster under a unanimous consent agreement. Such an arrangement requires cooperation that Senate leaders have not announced.

The Senate Banking Committee approved the bill 15 to 9 on May 14. Senator Cynthia Lummis later released a merged 616-page proposal combining work by the Banking and Agriculture committees. The revised measure remains on the Senate legislative calendar without a full chamber vote. crypto.news reported on Aug. 4 that government funding legislation and nominations occupied the available floor schedule. The omission doesn't legally kill the CLARITY Act. Little time remains for debate and a final vote before lawmakers depart.

Hougan's SEC Fallback

Hougan based his fallback scenario on comments from SEC Chair Paul Atkins, who said the agency was "ready, willing, and able" to address several matters covered by the legislation. Hougan believes rules adopted under Atkins could initially prove more favorable to innovation than compromises required for a bipartisan law. He said they "may even be an accelerant." No such effect is assured.

Atkins has supported agency action through Project Crypto, including work on token classifications and capital formation. He has also backed congressional legislation. In an official speech, Atkins said statutory language provides the strongest protection against future regulators reversing the current approach.

The CLARITY Act would divide digital asset jurisdiction between the SEC and the Commodity Futures Trading Commission. The updated congressional summary covers token disclosures, digital commodity exchanges, customer property, decentralized finance, stablecoin rewards and anti-money laundering requirements.

Within its existing authority, the SEC can change rules covering securities and token offerings. It cannot independently grant the CFTC nationwide authority over digital commodity spot markets. SEC rules could therefore provide part of the framework. They don't supply the complete structure Congress is considering.

crypto.news reported previously that agency rules are also less durable than legislation. A future commission could revise or withdraw them through another regulatory process. Changing a federal statute requires new congressional action.