a16z partner: It’s time for the “CLARITY Act.”

Author: Chris Dixon, a16z Partner

Translated by: DeepChao TechFlow

**DeepChao Quick Read: **The GENIUS Act has sparked a 50% surge in the stablecoin market within half a year, attracting $13 billion in investment—showing that clear regulation can unlock innovation instead of strangling it. But stablecoins account for only 15% of the crypto market. The blockchain networks that power them still lack federal rules—like regulating smartphones but ignoring the cellular networks. The CLARITY Act will fill that gap, determining whether the United States can lead the next generation of financial infrastructure the way it once dominated the internet.

Every generation gets a chance to upgrade the infrastructure.

The 1990s were the era of the internet. Policymakers worried it would disrupt existing industries and create new risks. But they didn’t force this technology into outdated regulatory frameworks; they built rules that allowed innovation to flourish while protecting consumers. The result was one of the greatest periods of economic growth in U.S. history.

Today, we face a similar opportunity on blockchain networks. Stablecoins make payments faster and cheaper. Tokenization is modernizing capital markets. Both depend on blockchain infrastructure.

These technologies will move forward regardless of whether Congress acts. Whether the U.S. sets the standards—or leaves this territory to others—is up to us.

The GENIUS Act proves that clear rules work

The GENIUS Act shows what well-thought-out policy can accomplish. Stablecoins are like digital dollars that move easily around the internet, the way Bitcoin does. Sending $200 from the U.S. to Colombia through traditional channels can cost more than $12, taking days. With stablecoins, the same transfer can settle in mere cents and seconds.

Regulatory uncertainty has long blocked stablecoin adoption. The GENIUS Act changes that. By establishing reserve requirements and an issuer framework, it removes confusion and releases growth.

The outcome is obvious. The stablecoin market is about $315 billion in size, up more than 50% from a year ago, and dollar-backed tokens have become one of the fastest-growing channels for U.S. money abroad. According to Visa statistics, stablecoins processed $1 million in transaction value over the past 12 months. Major institutions—including JPMorgan, Citibank, Visa, Mastercard, and BlackRock—are getting deeper into blockchain infrastructure.

The key is that the dollar is winning. Millions of people worldwide who lack convenient access to traditional dollar accounts can now hold and trade digital dollars through software wallets. Clear rules help anchor this new system to U.S. standards and institutions, rather than to competitive alternatives.

GENIUS shows that smart regulation expands markets instead of limiting them. But it solves only part of the problem.

Blockchain networks still lack rules

Stablecoins account for less than 15% of the crypto market by market cap, but they rely on the remaining 85% of the underlying blockchain networks—networks that still don’t have a coherent federal framework. That’s like regulating smartphones while ignoring the cellular networks.

The CLARITY Act corrects this.

At its core, CLARITY provides clear rules for blockchain networks and defines regulatory responsibilities for the digital asset markets. It incentivizes transparency, reduces risk, and promotes competition under a set of shared standards. It helps prevent the next FTX disaster by empowering regulators to oversee intermediaries using proven principles from traditional finance—proper custody, segregation of customer assets, and adequate disclosure. It also sets up the next wave of institutional adoption.

Major companies are already acting. BlackRock has launched a tokenized fund. JPMorgan is building blockchain-based payment systems. DTCC, which holds $1.14 million in assets under custody, is preparing to expand the tokenized securities footprint through the Canton network. CLARITY eliminates barriers to entry and provides a clear compliance path for traditional finance. This benefits not only the crypto industry, but also consumers, investors, and the long-term competitiveness of U.S. capital markets.

The choices are in front of us

History shows that open, neutral platforms governed by clear rules create the greatest value. The internet succeeded because entrepreneurs knew the rules of the game. They could build, attract capital, and compete based on merit rather than regulatory guesswork. Blockchain networks should get the same opportunity.

The idea that regulation and innovation are opposites is a false premise. GENIUS has already disproven it: in the second half of 2025—after the GENIUS Act was signed into law—more than $13 billion flowed into investments in crypto startups, nearly double the $6.9 billion invested in the first half of that year before GENIUS. At the same time, forecasts show that the tokenized assets market will grow 100x over the next few years. The real choice is whether, between certainty and uncertainty, the U.S. will claim its leadership—building the future at home—or whether it will stand by and let it get built elsewhere, under frameworks designed by others.

No law is perfect, and the CLARITY Act is no exception. The reality is that crypto currently provides no consumer protections. CLARITY puts those protections in place. As with any bill, nobody gets everything they want, but the version released today will push the industry forward. It reflects months of bipartisan negotiations and major industry compromises. No matter what remains imperfect, the CLARITY Act is clearly better than continuing with a system that has no safeguards whatsoever.

This year’s decision in Congress will determine where the next era of financial infrastructure will flourish and who gets to write the rules. If the CLARITY Act passes, it will let the U.S. lead again, just as it did in commercial internet days. Not acting means innovation will move elsewhere, operating under frameworks designed by others.