The most important law in crypto history is just two and a half weeks away from July 4th. And it still hasn't been signed.
Patrick Witt wrote this on X last week: "We have a big week ahead for Clarity. Behind the scenes, work has continued resolutely since the Banking Committee vote. The issue has narrowed, good-faith proposals are being put on the table to close the gap. But time is critical."
This single tweet contains the most important sentence in the crypto market right now. Time is critical.
Let me explain where we stand, what is needed, and what is at stake.
The CLARITY Act passed the Senate Banking Committee on May 14th with a 15-9 vote. 13 Republicans and 2 Democrats voted together. It was placed on the Senate General Calendar on June 1st. This technically means it can be brought to a general Senate hearing. But 60 votes are needed for a general hearing. Republicans have 53 seats. So at least 7 Democrats need to vote yes. Only 2 Democrats passed it in the committee. This 5-seat difference is currently the only real obstacle to the law. Why aren't these 5 votes coming through? There are two problems.
First, the ethics clause. The Senate Banking Committee rejected a Democratic proposal restricting the Trump family and government officials' involvement with crypto assets by a vote of 13 to 11. Democrats say it's impossible to reach 60 votes without this clause. Senator Kirsten Gillibrand explicitly stated that without a strong ethics clause, Democrats will not pass this bill. Patrick Witt made the White House's position clear: no clause specifically targeting the President will be allowed. But an ethics rule applied equally to everyone, from the highest-ranking employee to the newest intern, is acceptable.
Second, DeFi and developer protections. Section 604, which provides legal protection for decentralized protocol and open-source software developers, is controversial. Some Democrats want anti-money laundering obligations to also apply to DeFi. The crypto sector opposes this. More than 200 companies and associations sent a joint letter to the Senate leadership last week, pressuring them to pass the bill without touching developer protections. So what will the result be?
Galaxy Research sees a 60-75% chance of it passing. The White House's target is July 4th. But Galaxy's own analysts point to the week of August 3rd as a more realistic date. Digital Chamber president Cody Carbone said that this law will not be brought to the table without an ethical consensus. Because it is risky to talk about it without being sure of 60 votes. If there is a consensus, if there is time, if 60 votes are found, the law will pass.
What happens if it doesn't pass? TD Cowen analysts see a scenario where it is delayed until 2027. Senators Lummis and Moreno spoke much more harshly. If this law does not pass before August, comprehensive crypto regulation may not come until 2030. The midterm campaign freezes everything. What does this mean for the market?
Standard Chartered predicts an additional $4 to $8 billion in inflows into XRP ETFs if the law passes. WisdomTree's spot XRP ETF application is awaiting approval. Ripple is in the DTCC's tokenization working group. Spot XRP ETFs have attracted $1.43 billion since their launch and continue to grow. All of this happened before the law was passed. If the law passes, the picture will change radically.
I am holding my XRP position at Gate during this process. An amount I can afford to lose. As always.
But I also know that markets price events in advance. You don't have to wait until July 4th. The market will react as news of the deal approaches. Even Witt's tweet last week contributed to a 1.9% movement.
Senator Lummis said last week, "I've spent years getting to this point. I'm not going to let another country write the rules for assets that Americans invented. Let's pass the Clarity Act."
I agree. Just for a different reason.
#MyGateTradeStory about #CLARITYAct
This content is for informational purposes only and does not constitute financial advice.
Patrick Witt wrote this on X last week: "We have a big week ahead for Clarity. Behind the scenes, work has continued resolutely since the Banking Committee vote. The issue has narrowed, good-faith proposals are being put on the table to close the gap. But time is critical."
This single tweet contains the most important sentence in the crypto market right now. Time is critical.
Let me explain where we stand, what is needed, and what is at stake.
The CLARITY Act passed the Senate Banking Committee on May 14th with a 15-9 vote. 13 Republicans and 2 Democrats voted together. It was placed on the Senate General Calendar on June 1st. This technically means it can be brought to a general Senate hearing. But 60 votes are needed for a general hearing. Republicans have 53 seats. So at least 7 Democrats need to vote yes. Only 2 Democrats passed it in the committee. This 5-seat difference is currently the only real obstacle to the law. Why aren't these 5 votes coming through? There are two problems.
First, the ethics clause. The Senate Banking Committee rejected a Democratic proposal restricting the Trump family and government officials' involvement with crypto assets by a vote of 13 to 11. Democrats say it's impossible to reach 60 votes without this clause. Senator Kirsten Gillibrand explicitly stated that without a strong ethics clause, Democrats will not pass this bill. Patrick Witt made the White House's position clear: no clause specifically targeting the President will be allowed. But an ethics rule applied equally to everyone, from the highest-ranking employee to the newest intern, is acceptable.
Second, DeFi and developer protections. Section 604, which provides legal protection for decentralized protocol and open-source software developers, is controversial. Some Democrats want anti-money laundering obligations to also apply to DeFi. The crypto sector opposes this. More than 200 companies and associations sent a joint letter to the Senate leadership last week, pressuring them to pass the bill without touching developer protections. So what will the result be?
Galaxy Research sees a 60-75% chance of it passing. The White House's target is July 4th. But Galaxy's own analysts point to the week of August 3rd as a more realistic date. Digital Chamber president Cody Carbone said that this law will not be brought to the table without an ethical consensus. Because it is risky to talk about it without being sure of 60 votes. If there is a consensus, if there is time, if 60 votes are found, the law will pass.
What happens if it doesn't pass? TD Cowen analysts see a scenario where it is delayed until 2027. Senators Lummis and Moreno spoke much more harshly. If this law does not pass before August, comprehensive crypto regulation may not come until 2030. The midterm campaign freezes everything. What does this mean for the market?
Standard Chartered predicts an additional $4 to $8 billion in inflows into XRP ETFs if the law passes. WisdomTree's spot XRP ETF application is awaiting approval. Ripple is in the DTCC's tokenization working group. Spot XRP ETFs have attracted $1.43 billion since their launch and continue to grow. All of this happened before the law was passed. If the law passes, the picture will change radically.
I am holding my XRP position at Gate during this process. An amount I can afford to lose. As always.
But I also know that markets price events in advance. You don't have to wait until July 4th. The market will react as news of the deal approaches. Even Witt's tweet last week contributed to a 1.9% movement.
Senator Lummis said last week, "I've spent years getting to this point. I'm not going to let another country write the rules for assets that Americans invented. Let's pass the Clarity Act."
I agree. Just for a different reason.
#MyGateTradeStory about #CLARITYAct
This content is for informational purposes only and does not constitute financial advice.
