According to reports from BeInCrypto, the CLARITY Act failed to advance after the Senate voted 49 to 50 on September 15, falling short of the 60 votes needed for passage. Bitwise investment chief Matt Hougan has identified four key areas that gained from the bill's collapse, arguing that regulators have moved further than the legislation would have allowed. The failed bill would have barred platforms from paying stablecoin yield with penalties up to $5 million per violation, but without it, the 2025 GENIUS Act still applies, restricting only issuers from paying interest. Bitcoin has gained 8% and Ethereum 7% since the vote, while several altcoins posted larger gains. NEAR rose 104%, Uniswap (UNI) gained 49% and Avalanche (AVAX) advanced 43% since the Senate vote, significantly outperforming traditional markets. The Congressional Research Service analysis published on September 30 identified 11 categories of crypto activities that the Senate-reported CLARITY Act would permit for U.S. banking organizations and credit unions, including digital asset underwriting and dealing.
As reported by BeInCrypto, Hougan sees Coinbase as the biggest winner since it uses stablecoin rewards to attract customers. For exchanges, the failed bill would have created a national spot license, potentially easing entry for traditional finance giants. Without this license, Hougan notes that Coinbase and Kraken maintain the moat built from state-by-state licenses. The legislation would also have limited how firms combine exchange and broker services, a lucrative crypto model that exchanges can now continue to operate. One key dispute during negotiations involved whether exchanges could pass stablecoin-related interest or rewards to customers, with banks opposing provisions that would have allowed such benefits. The final version of the CLARITY Act would have prohibited platforms from paying stablecoin interest or yield to customers in any form, but the Genius Act remains in effect, restricting only issuers from paying interest. According to the Congressional Research Service analysis, the Senate-reported text would permit all types of banking organizations and credit unions to undertake listed crypto activities, unlike the House-passed version which would have restricted such permissions to financial holding companies.
According to BeInCrypto, two days after the vote, the Securities and Exchange Commission (SEC) granted a five-year exemption for tokenized US stocks, a development that Hougan says would have taken years under the proposed legislation. He identifies Securitize, the transfer agent behind BlackRock's BUIDL fund, as the main beneficiary. The company provides tokenization infrastructure for funds from BlackRock, Apollo and KKR and serves as the transfer agent for BlackRock's BUIDL fund. Additionally, SEC guidance from September 25 stated that a buyback announcement on a functional network does not, alone, create a security. NEAR Protocol, one of the buyback tokens Hougan cites, has climbed 126.62% since the vote, significantly outperforming Bitcoin's 10.39% and Ethereum's 6.86% gains over the same period. Hougan noted that revenue-generating tokens have clearer rules without Clarity than they would have had with it, as uncertainty remained over whether buybacks could affect a token's regulatory classification under the proposed framework. The Congressional Research Service notes that digital asset underwriting and dealing permissions would exceed banks' current authority in comparable securities markets, as banks can currently underwrite only limited securities categories.
As reported by BeInCrypto, Hougan acknowledges that these gains rest on agency action, which a new administration could reverse from January 2029. Former New York governor Andrew Cuomo warns that a new Congress could scrutinize agency rules if Democrats win in November, making the midterm elections a test of whether these four winners maintain their competitive advantages. The executive concludes that crypto sacrificed long-term certainty for better rules, faster, describing this as a favorable tradeoff for the industry's development. Hougan wrote that the great irony for banks is that their refusal to compromise will likely end up helping every stablecoin take market share from the traditional system, as the legislation's failure allows for continued experimentation and innovation in the crypto space. Sen. Cynthia Lummis has argued that the legislation would allow U.S. banks to buy and hold Bitcoin directly, with her forecasting that resulting demand could push prices "dramatically" higher, though these permissions would require legislation to become law. The procedural setback did not constitute a final vote on the legislation itself, with seven Democratic senators describing the outcome as "not the end" and remaining committed to negotiations.
