Treasury’s Bessent Says Crypto Clarity Act Could Calm Markets

What Happened

Speaking to CNBC on Friday, Bessent said passage of the proposed Clarity Act, a market structure bill aimed at defining oversight of digital assets, would ease uncertainty among investors.

As reported, Bitwise Chief Investment Officer Matt Hougan has said that gold’s surge past $5,000 an ounce and mounting uncertainty around US crypto legislation are shaping a critical moment for digital asset markets.

Political and geopolitical factors are adding further uncertainty. Internal divisions at the Fed, combined with leadership questions and rising tensions following a US naval deployment toward Iran, have pushed investors toward traditional havens.

Market Context

The cryptocurrency market has swung sharply in recent weeks, with both Bitcoin and Ethereum trading well below the record levels they reached last year.

Bessent says the proposed Clarity Act could reduce uncertainty and stabilize crypto markets.

“Some clarity on the Clarity bill would give great comfort to the market,” he said, adding that lawmakers should move quickly to place the legislation on the president’s desk this spring.

“There is a group of Democrats who want to work with Republicans on getting a market structure bill,” he said.

Prediction market Polymarket currently assigns roughly a 62% probability that the Clarity Act becomes law by the end of 2026.

Hougan said the combination of rising demand for assets outside government control and fading confidence in near-term regulatory clarity could influence both crypto adoption and price action in the months ahead.

Why It Matters

The bill faces political hurdles and opposition from some firms despite a 62% passage outlook.

However, US Treasury Secretary Scott Bessent believes a pending regulatory framework could help steady sentiment.

In recent interviews, Bessent labeled dissenting firms “recalcitrant actors” and argued that participants unwilling to operate under a regulatory framework could relocate elsewhere.

Political dynamics could also shape the bill’s prospects. Bessent warned that a shift in congressional control following upcoming midterm elections might halt negotiations entirely.

Details

Key Takeaways:

He attributes part of Bitcoin’s recent drop to industry resistance to regulation.

Bessent Urges Swift Passage of Crypto Clarity Bill This Spring

Bessent described part of the recent downturn as avoidable. Bitcoin has fallen more than 29% over the past month, a decline he characterized as partly driven by industry resistance to regulation.

“But 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.”

His latest comments were more measured than earlier criticisms directed at companies opposing the proposal.

US-based exchange Coinbase withdrew support over provisions restricting companies from offering yield on stablecoins to retail users.

Chief executive Brian Armstrong said at the time the firm would prefer no legislation over one it considers flawed.

He also pointed to prior regulatory pressure on the sector, saying policies during the previous administration came close to an “extinction event” for parts of the industry.

Gold Rally, Clarity Act Uncertainty a Turning Point for Crypto

He also flagged growing uncertainty around the Clarity Act, legislation aimed at cementing a pro-crypto regulatory framework in the US.