Grayscale's Zach Pandl warns that if the CLARITY Act fails, new US crypto investment will shift overseas. The Senate vote is set for after the August recess.
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Zach Pandl, head of research at Grayscale, said the crypto ecosystem would not face an immediate collapse if the Digital Asset Market Clarity Act fails to become law. The real risk, he said, is that new investment activity in the United States will dry up as entrepreneurs and capital move to jurisdictions with clearer rules.
Pandl, whose firm manages billions in crypto assets, acknowledged the bill's chances of passing this year are slim. The Senate has scheduled a vote after the August recess. Even if it fails, he said, agencies like the SEC would step in with rulemaking to fill the gaps.
“CLARITY not passing won’t have an immediate impact on the functioning of major blockchains, the demand for Bitcoin as a store of value, or on the growth of stablecoin payments,” Pandl said. “The legislation would have provided a more comprehensive rulebook for digital assets in the US, but the industry has moved forward for almost 17 years without it.”
He called the bill’s failure a “missed opportunity” that would likely push future investment overseas. “The lack of comprehensive market structure legislation could hold back new investment activity in the United States… The lack of fulsome market structure regulation in the US may drive entrepreneurial activity overseas on the margin,” Pandl said.
Pandl’s view lines up with Michael Saylor, the executive chairman of Strategy (formerly MicroStrategy). Saylor said in July that bitcoin would succeed with or without legislation, but that America needed the bill to stay competitive. “Bitcoin will succeed with or without legislation, but America needs clarity for digital assets,” Saylor said.
Senator Bernie Moreno, a Republican from Ohio, said negotiations between Democrats and Republicans on the CLARITY Act have ended. The vote is scheduled for when the Senate returns from its August recess. The outcome will test whether the US can keep its lead in the crypto market analysis as other jurisdictions offer clearer rules.
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