The cryptocurrency market has seen a rise following the failure of the CLARITY Act in the U.S. Senate, as regulatory measures are beginning to shift more favorably for the industry. This observation was made by Matt Hougan, the Chief Investment Officer of Bitwise.

“After the [vote], regulators intervened, taking actions that are significantly more aggressive in supporting cryptocurrencies than what was originally proposed in the bill,” the executive noted.

Among the key regulatory bodies Hougan mentioned are the U.S. Securities and Exchange Commission (SEC) and the U.S. Commodity Futures Trading Commission (CFTC).

The Bitwise CIO also identified four areas that have benefited from the CLARITY Act's failure.

Stablecoins

The segment for stablecoins continues to be governed by the GENIUS Act, which was enacted in 2025. This law prohibits stablecoin issuers from paying interest but does not restrict exchanges.

The final version of the CLARITY Act included penalties of up to $5 million for violations of this prohibition. Hougan believes that current platform configurations still allow them to offer users rewards for holding stablecoins.

“Coinbase has benefited the most, as it utilizes rewards to attract customers. The main irony for banks is that their refusal to compromise will likely help stablecoins reclaim market share from the traditional system,” he added.

Crypto Exchanges

According to Hougan, the bill's failure means that existing operational models for crypto exchanges will remain intact. He reminded that the proposed legislation aimed to create a national licensing system for spot exchanges instead of state-by-state licensing.

This rule would have restricted the combination of exchange and broker functions. Among the potential beneficiaries, Hougan highlighted local platforms such as Coinbase and Kraken, which offer a wide range of financial services.

Tokenization

Just two days after the CLARITY Act's failure, the SEC permitted limited trading of tokenized stocks. These relaxations are set for five years, apply only to U.S. stocks, and are volume-restricted.

This directive exempts trading platforms from the requirement to register as exchanges and liquidity providers from registering as dealers. Hougan believes this removes them from the regulatory framework designed for traditional platforms.

The company Securitize, which tokenizes funds for BlackRock, Apollo, and KKR, stands to gain the most from this change, the investment director emphasized.

Yield Tokens

Another beneficiary mentioned by Hougan is tokens featuring buyback mechanisms funded by protocol revenue. He cited an SEC clarification stating that a buyback program, once a functioning network is launched, does not inherently classify the asset as a security.

The main risk, according to him, is that the current relaxations are not codified into law. A new U.S. administration in January 2029 could take a tougher stance on the industry, the expert warned.

It is worth noting that on September 24, the Federal Reserve initiated a public discussion on two proposed rules for implementing the GENIUS Act for payment stablecoin issuers under its jurisdiction.

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