Why is the CLARITY Act suddenly moving — and what could it mean for crypto?
There’s never a dull moment onchain. Here’s what you need to know this week:
Crypto is rallying for a second straight week. The CLARITY Act just hit "the 1 yard line" — but what would it actually mean for crypto if it passes?
BlackRock's CEO says bitcoin’s bottom is in. Why Larry Fink says he's "very bullish" on markets for the next 12 months.
Visa, Stripe, and major banks are all making stablecoin moves. A year after the GENIUS Act, here's why the race is on.
MARKET BYTES
Crypto rallies for second week on CLARITY act optimism
Crypto prices rallied again this week, with bitcoin closing in on $67,000 and ETH climbing back above $1,900 for the first time since early June. Crypto-related stocks also got a boost.
Prices began to tick upwards last week after softer-than-expected inflation numbers reduced traders’ fears that the Federal Reserve would increase interest rates at next week’s meeting.
This week, despite the Iran conflict and fears of rate hikes both ramping back up, prices rose even higher as reports emerged suggesting that the landmark crypto regulation bill known as the CLARITY act could be moving closer to passing in the Senate.
On Tuesday, Treasury Secretary Scott Bessant said the law had made it to “the 1 yard line” — adding, as Bloomberg put it, “a fresh catalyst to signs the sector’s latest downturn may already have run its course. The technical and institutional backdrop has quietly improved, while investor sentiment seems to have turned a corner.”
Here’s more news you should know…
What is the CLARITY act?
The CLARITY act would answer some of the major questions hanging over the crypto industry. It would define the Commodities and Futures Trading Commission (CFTC) as the agency overseeing crypto markets, codify the right to self-custody of crypto assets, and create legal definitions for key crypto terms including “mature blockchain” and “digital commodity.”
Assuming the bill gets the 60 votes it needs in the Senate, it goes back to the House, where leadership has pledged to move quickly — and then to President Trump’s desk to be signed into law.
In a new essay published by a16z crypto, former congressman Patrick McHenry compared the law to the 1996 Telecommunications Act, which paved the way for the modern internet. “The framework in the Clarity Act can ensure entrepreneurs feel confident in creating jobs and building businesses without fear of arbitrary or unexplained crackdowns,” he wrote. “Upon becoming law, it will establish protections for consumers and investors, and give law enforcement agencies the tools they need to identify and stop criminals and bad actors seeking to hurt the American people.”
Seeking clarity… As of Wednesday afternoon, around 76% of prediction market traders said that the Senate will vote on the act before it leaves for August recess — up from around 45% earlier this month.
Crypto ETF inflows accelerated this week
After shedding more than $8 billion in the last two months, crypto ETFs finally flipped positive last week, and appear to be picking up momentum. In a five-day stretch leading up to Tuesday, spot BTC ETFs attracted around $727 million in new capital, according to CoinDesk. Several altcoins ETFs — particularly those that hold Solana and Hyperliquid — also saw gains.
“I think it is a sign of bottoming,” Richard Galvin, executive chairman at crypto investment firm DACM, told Bloomberg. “Given their size and breadth, the ETFs have become a good read on general sentiment to Bitcoin and the sector. So an about-face after eight straight weeks, now confirmed across a fortnight, is positive.”
Fink thinks… BlackRock CEO Larry Fink, who leads the world’s largest asset manager, agrees that the bottom is likely in for BTC. Speaking to CNBC, Fink argued that the “washout” of leverage in crypto markets over the last few months has been healthy. "I'm very bullish on the markets over the next 12 months," he said.
STABLECOIN ROUNDUP
A year after the GENIUS act passed, stablecoins have become crypto’s hottest sector
Even as crypto markets struggled for the last couple of months, momentum for stablecoins continued to ramp up. Why? In part because stablecoins are one element of the crypto economy that is operating against a comprehensive Federal regulatory backdrop, thanks to the GENIUS act, which has just celebrated its one year anniversary.
In the year since the GENIUS act passed, Wall Street’s biggest firms have been busy weaving stablecoins into the global financial infrastructure. With Visa and Standard Chartered making recent major stablecoin forays, and Stripe working to acquire PayPal as part of its stablecoin strategy, the sector’s competitiveness highlights the extent to which digital, blockchain-based payments are seen as the future of finance.
What’s the latest? Here’s what you need to know...
The GENIUS Act just turned one
The law, which established the first comprehensive framework for dollar-backed stablecoins in the U.S., cleared the way for financial firms to start implementing their stablecoin strategies.
Even though the law isn’t fully in effect yet, its passage last July set off a wave of stablecoin activity that’s only accelerating. The stablecoin market cap sits at $310 billion, up more than 20% since last July; stablecoin transaction volume on Ethereum is up 50%; and major institutions are racing to get in. “This shift opens the door for banks, networks and platforms to participate with confidence,” said Visa’s CEO at the end of last year.
There are still some unanswered questions, however, around how regulators will apply and enforce the framework established in the law. Agencies including the Federal Reserve, FinCEN, OCC, FDIC and NCUA, still need to finalize their respective rules, and have until Jan. 18, 2027 before the law goes fully into effect.
Visa is launching its own stablecoin platform.
The payment network, which saw more than $16 trillion in overall transaction volume last year, announced this week that it will be launching an internal platform later this year aimed at making it easier for banks, fintechs, and merchants to move, issue, and manage stablecoins.
The main stablecoin on the platform will be OUSD, which is backed by more than 140 firms including Visa, Mastercard, BlackRock, and Coinbase. Businesses will be able to mint and redeem OUSD without any fees or volume limits, and any earnings made from OUSD’s reserves will be distributed amongst participating businesses.
Visa already settles more than $7 billion in stablecoin transactions annually via its pilot program that spans across nine blockchains, including Base, Polygon, Canton Network, Circle's Arc, and the Stripe-backed Tempo.
The world’s biggest finance institutions keep expanding their stablecoin strategy
This month, Standard Chartered became the first “globally systemically important bank” to become licensed to offer institutional clients access to mint and redeem USDC directly through the bank. The move came days after another global bank, BNY, announced a similar initiative.
“Banks aren't asking whether they'll use stablecoins anymore,” said Andrew MacKenzie, the founder and CEO of Scotland-based stablecoin issuer Agant. “They're deciding how they'll use them."
Institutions are also increasingly less interested in issuing their own tokens, preferring instead to have access to major tokens’ robust networks. Circle, for instance, has launched USDC on 35 blockchains and features reliable, institutional-grade liquidity. "The network is what creates the value," said Adrian Cachinero Vasiljevic, co-founder and partner at Steakhouse Financial in an interview. "The stablecoin itself becomes almost secondary.”
NUMBERS TO KNOW
$114 trillion
The amount in securities that is held in custody by the Depository Trust & Clearing Corporation. The DTCC, which settles most stock trades in the U.S., just began a live pilot of tokenized stock trades featuring more than 40 leading firms, including BlackRock, JPMorgan, Goldman Sachs, and the New York Stock Exchange
$1 billion
The valuation of banking startup Augustus after a recent $180 million fundraise. The startup is looking to build the “Global Dollar Bank,” by allowing international fintechs access to USD accounts and payment rails using stablecoins alongside traditional rails like SWIFT and ACH.
$70 million
Amount paid by crypto-focused fund manager Galaxy Digital to put its name on Texas Tech’s football stadium for 15 years. The firm will now be the university’s "official data center and digital assets partner,” and the stadium will be renamed Galaxy Stadium. Last week, Ripple signed a marketing deal with the University of Kansas, and IREN, a bitcoin miner and AI data center company, signed a jersey patch deal with the Golden State Warriors.
49%
The probability that prediction traders have assigned to LeBron James returning to Miami next season, after the team accidentally posted a YouTube link to a scheduled live stream for next week titled "LeBron James Introductory Press Conference." The NBA superstar is being courted by a number of teams, with traders picking Miami, Cleveland (30%), and Golden State (15%) as having the best chances to land him.
TOKEN TRIVIA
Who of the following is not an Ethereum co-founder?
A
Vitalik Buterin
B
Eth Ledge
C
Gavin Wood
D
Charles Hoskinson
Find the answer below.
Trivia Answer
A
Vitalik Buterin
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