US Treasury Secretary Scott Bessent announced on Thursday that the long-debated Clarity Act, a piece of crypto legislation, is nearing passage. Bessent believes this bill will help stabilize currently volatile crypto markets and restore much-needed investor confidence. His comments come as Bitcoin's price has plummeted by nearly 50% since its October 2025 all-time high, while Ethereum has fared even worse, dropping 58% from its August peak of $4,946 to $2,048.
Bessent emphasized the importance of passing the Clarity Act, stating that it would provide "great comfort to the market" during a period of historical sell-offs. He acknowledged the inherent volatility of crypto assets but suggested that clearer legislation would soothe market anxieties. The crypto market experienced a significant downturn in October 2025, when a $19 billion liquidation event in Bitcoin's history wiped out leveraged bets, and major cryptocurrencies have struggled to recover since.
The Clarity Act, which aims to establish clear digital asset regulations, has faced a deadlock, particularly after Coinbase withdrew its support in January. Key points of contention include the regulation of stablecoins, with banking executives clashing with the crypto industry. Banks argue that allowing yield on stablecoins could draw deposits away from traditional lenders, while crypto firms like Coinbase advocate for continued yield-bearing stablecoin products to foster innovation. Crypto executives and banking chiefs reportedly have until March 1 to reach an agreement on the market structure bill, with Bessent expressing optimism that the bill could be on the president's desk by spring.
President Donald Trump is also pushing for the Senate to pass the Clarity Act before its August recess, with the House having approved it in July 2025. The bill aims to assign oversight of crypto spot markets to the CFTC, define "mature blockchain" criteria, and establish stablecoin consumer protections. While Bitcoin is already recognized as a commodity and less dependent on the act, other areas like DeFi, Layer 2 networks, and yield-bearing stablecoins face significant regulatory ambiguity. The Senate requires at least seven Democratic votes for passage, and debates continue over elements like congressional crypto disclosure rules.
