Grayscale Research Head: Crypto Industry Can Thrive Without CLARITY Act

Zach Pandl, Head of Research at Grayscale, contends that the US crypto industry can advance even if the CLARITY Act is not passed into law, pointing to nearly 17 years of crypto ecosystem development without such legislation. In the absence of CLARITY, stablecoins would retain their ability to function as payment methods and Bitcoin would continue operating as a store of value, meaning the law's failure would not create immediate market disruption.

However, Pandl identifies a more significant long-term concern: the absence of comprehensive regulatory clarity could impede future innovation and investment in the US. Without clear rules governing which securities laws apply, how tokenized assets can be issued, and what obligations crypto companies face, investors and businesses may face substantial uncertainty in their decision-making.

Pandl expects that the SEC and other regulatory bodies can partially fill this gap through rulemaking. He notes that the current administration has already advanced institutional crypto custody, banking access for crypto firms, staking regulations, and exchange-traded products. Nevertheless, without comprehensive market structure rules at the legislative level, Pandl argues that a greater share of new investment may flow overseas.

Polymarket odds currently place CLARITY Act approval in 2026 at just 21%, down 44 percentage points from earlier assessments. Patrick Witt, Executive Director of the President's Council of Advisors for Digital Assets, has argued that Congress had sufficient time to reach agreement and that further delays reflect political positioning rather than genuine drafting challenges. Pro-crypto Democrats, including Senate Minority Leader Chuck Schumer, pushed for extended negotiations rather than a procedural vote before the August recess.