U.S. Treasury Secretary Urges Crypto Clarity Act to Calm Volatile Markets

U.S. Treasury Secretary Scott Bessent’s central thesis is clear: legislative certainty is the missing ingredient for a calmer cryptocurrency market. In a recent CNBC interview, Bessent emphasized the urgent need for the Clarity Act, a comprehensive crypto market structure bill, stating, “Some clarity on the Clarity bill would give great comfort to the market.” He advocated for swift passage, aiming for the bill to reach the president’s desk this spring. This push comes against a backdrop of pronounced volatility, with major assets like Bitcoin and Ethereum trading far below their previous all-time highs.

Bessent directly linked the market’s recent “pain” to the legislative impasse. He noted there is a bipartisan group of Democrats and Republicans willing to collaborate on the market structure bill. However, he contends that progress is being blocked, not by lawmakers, but by factions within the crypto industry itself. “There are a group of crypto firms who have been blocking it… that doesn’t seem to have been good for the overall crypto community,” Bessent remarked, framing the ongoing price declines as a consequence of this internal resistance.

The Treasury Secretary’s most pointed criticism is reserved for specific crypto companies opposing the bill’s current form, with Coinbase as the most prominent example. Bessent’s recent rhetoric has escalated from calling such parties “nihilists” and suggesting they “move to El Salvador” to labeling them “recalcitrant actors.” This opposition crystallized around a specific provision in the Clarity Act that would restrict companies from offering yield on stablecoins to consumers.

Coinbase’s withdrawal of support over this clause represents a significant hurdle. CEO Brian Armstrong’s stance—”We’d rather have no bill than a bad bill”—epitomizes the industry’s dilemma: accepting potentially restrictive regulation now versus enduring prolonged uncertainty. Bessent interprets this stance as counterproductive, arguing that the resulting legislative delay actively harms the market he believes the bill is designed to protect and stabilize.

Beyond industry friction, Bessent identified a formidable political threat to the Clarity Act. He warned that if Democrats regain a majority in the House of Representatives following the upcoming midterm elections, the prospects for the bill would “just fall apart.” He pointed to the Biden administration’s previous regulatory approach to crypto, which he dramatically characterized as “almost an extinction event,” to underscore the perceived risk of a Democratic-controlled legislative agenda.

This political calculus injects a significant element of uncertainty into the bill’s future. The current probability, as gauged by predictors on the Polymarket platform, sits at approximately 62% for the bill being signed into law by the end of 2026. This figure, while leaning toward passage, reflects the substantial obstacles ahead. It encapsulates the combined risk of sustained industry lobbying against certain provisions and a potential shift in the political landscape that could derail bipartisan cooperation entirely.

The debate over the Clarity Act has thus become a high-stakes standoff. On one side, the U.S. Treasury advocates for a regulatory framework to tame volatility and integrate crypto into the traditional financial system. On the other, key industry players resist what they see as overreach, preferring the risks of the status quo to a bill they deem flawed. The outcome will hinge on whether political momentum can overcome this divide, or if the “self-induced” market pain Bessent describes continues in the absence of a legislative resolution.