The cryptocurrency market has remained highly volatile, with Bitcoin and Ethereum trading well below the record levels reached last year.
However, U.S. Treasury Secretary Scott Bessent said the successful passage of the CLARITY Act (also known as a crypto market structure bill) could help stabilize market conditions.
“In a time when we are having one of these historically volatile sell-offs, I think some clarity on the CLARITY bill would give great comfort to the market, and we could move forward from there,” Bessent told CNBC on Friday.
He emphasized the importance of advancing the legislation quickly, stating that it should be passed and delivered to U.S. President Donald Trump for signature by spring. Bessent noted that the timeline is significant in light of potential political shifts ahead of the 2026 midterm elections.
The CLARITY Act aims to define who regulates digital assets in the U.S., how tokens are classified, and which activities fall under securities or commodities law. The framework is critical to giving crypto firms and investors legal clarity, reducing regulatory overlap, and bringing activity back into the country after years of enforcement-driven oversight drove companies abroad.
The Treasury Secretary characterized some of crypto’s recent distress, which has seen Bitcoin plunge neary 30% over the last month, as “self-induced.”
“There is a group of Democrats who want to work with Republicans on getting a market structure bill,” he explained. “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.”
Several figures in the cryptocurrency sector, including Coinbase CEO Brian Armstrong, have voiced criticism of aspects of the bill. Concerns focus on its approach to regulating decentralized finance, rules governing stablecoin yield rewards, and the criteria it uses to classify tokens as securities. At the time of withdrawal of support for a version of the legislation moving through the Senate Banking Committee last month, Armstrong said, “We’d rather have no bill than a bad bill.”
Bessent also warned that opposition could come from political shifts, not just industry pushback. He noted that if Democrats secure a majority in the House of Representatives in this year’s midterm elections, the chances of passing the bill could effectively collapse.
“Look at what the Democrats did to crypto under the Biden administration. It was almost an extinction event,” he postulated.
Bitcoin was trading hands at $70,399 as of press time, after recovering from a sharp decline near $60,000 earlier in the month. The leading crypto, however, remains 45% below its $126,080 all-time high registered in October, according to CoinGecko data.
Source: https://zycrypto.com/u-s-treasurys-bessent-believes-passage-of-stalled-clarity-act-could-comfort-crypto-amid-market-slump/
