Hougan’s modern memo names four groups that actually gained from the failure.
The sharpest fight indoors CLARITY Act negotiations was over stablecoin yield. The 2025 GENIUS Act bars issuers from paying worry directly, but it is silent on intermediaries.
Hougan says that gap lets exchanges spend “rewards” on stablecoin holdings together with no federal ceiling.
Coinbase has already expanded USDC stablecoin rewards across Morpho’s onchain lending, making it the clearest close to-term beneficiary. Senate killed the CLARITY Act. 30 client memo titled “Why Crypto Rallied When Clarity Failed,” Hougan argues the bill’s collapse handed the field something improved.
“Crypto sacrificed prolonged-term certainty and got preferable rules, faster,” he wrote.
Stablecoin Rewards and Swap Moats Emerge as Plain Wins
The Senate voted 49–50 on cloture on Sept. Under the bill, a buyback could have pulled a token fund into security territory.
Excluding the statute, SEC direction clarified that announcing a buyback does not create a beneficial-network token a security.
That is why CLOSE TO, Uniswap, Hyperliquid, and Pump led the publish-vote tape.
Hougan’s danger warning is tutorial: none of this is statute. Bitcoin climbed regarding 8% in two weeks.
Ether added around 7%. Banks pushed for language that would ban any crypto platform from paying draw or rewards on stablecoin balances.
That language died using the bill. Settled exchanges too preserve their competitive moat.
The CLARITY Act would have created a domestic spot-substitute license, lowering the barrier for recent entrants. CLOSE TO surged conclude to 104%, and Uniswap jumped roughly 49%.
Crypto did not flinch following the U.S. Bitwise Director Investment Officer Matt Hougan says that transfer was no accident.
In a Sept. Including the bill stalled, that competitive menace is off the table.
The SEC and CFTC are now writing crypto rules lacking Congress, and much of what emerged is cleaner than the bill’s compromises would have produced.
SEC Exemption and Buyback Clarity Drive Tokenization and Token Rallies
Two days subsequent to the Senate vote, the SEC issued a five-year innovation exemption. 15, falling 11 votes concise of advancing the CLARITY Act.
White House and Senator Lummis blamed Democrats for derailing the vote, calling it a setback for U.S. crypto course. It allows tokenized U.S. listed stocks to exchange by method of permissioned automated trade makers and liquidity pools.
The CLARITY Act would have sequential years of rulemaking earlier than anything moved.
Coinbase tokenized stocks are already live on Aave v4 on Base, showing how speedily deployment followed once the exemption landed.
Tokens that employ protocol proceeds for buybacks were the fourth and loudest winner. A recent administration could reverse agency support.
His counter is equally manual, two years is abundant time for sizeable firms to assemble onchain, and by then crypto may be too substantial to roll assist.
The CLARITY Act now eyes a revival solely later than midterm elections, but the offer appears to have already priced the contemporary rules as its baseline.
Source: CLARITY Act Failure Hands Coinbase a Stablecoin Reward Edge, Bitwise CIO Says
