CLARITY Shall Wait, Blockchain Keeps Going

What happened

In a single tweet, Coinbase’s CEO effectively forced the U.S. Senate to pause the next steps on the CLARITY Act. The latest draft, shaped by last-minute concessions to Democratic lawmakers, included provisions deemed too restrictive by parts of the crypto industry, notably around decentralized finance, tokenized shares, and stablecoin rewards and yields.

The message from Coinbase was clear: no law is better than a bad law. Rather than locking in a framework that could structurally disadvantage crypto-native players, the industry chose to halt the process. As a result, the Senate markup was delayed, pushing CLARITY further down an already uncertain legislative timeline.

Before going further, it is worth recalling that the CLARITY Act is designed to regulate the broader crypto market, including non-stable tokens, exchanges, DeFi, and NFTs, while the GENIUS Act specifically governs stablecoins.

Impact on our Investment Case

Coinbase rules

Looking at the provisions added during negotiations, one could reasonably conclude that traditional financial institutions, especially banks, successfully lobbied to protect their incumbency. This is not surprising.

The passage of the GENIUS Act was a shock to the system. It formally legitimized stablecoins in the U.S. and triggered a rapid response across the financial ecosystem. Large banks, payment processors, and card networks are now actively building and integrating stablecoin infrastructure. This shift is already underway, with the GENIUS Act serving as the first building block in transforming financial infrastructure by integrating with blockchain.

The CLARITY Act would have accelerated this transition, which explains the safeguards that were attempted. But the balance of power has shifted. The industry now moves faster than the legislative process. Within that industry, Coinbase sits at the center. Its ability to support or reject a framework largely determines whether that framework is viable. In that sense, Coinbase does not just participate in the market; it increasingly shapes the acceptable direction of regulation.

The CLARITY Act will come back

The CLARITY Act is not dead. It is delayed.

All parties will return to the negotiating table because the need remains obvious. The crypto ecosystem requires legal definitions, clear regulatory roles, and a coherent market structure. This is ultimately the best way to accelerate innovation, protect investors, and avoid a regulatory far west.

Market dislocations like those seen in October 2025 must become exceptions, not recurring events. A credible framework is part of that solution.

That said, the timeline is now more uncertain. A rapid Democratic reversal in the coming weeks appears unlikely. More plausibly, negotiations will slow ahead of the midterm elections. Depending on the outcome, Democrats may regain leverage and attempt to reintroduce some of the provisions contested in the latest draft.

Our Takeaway

For stablecoins, the core investment case remains intact. The GENIUS Act already guarantees the deployment of stablecoins as a regulated payment rail in the U.S. This was the decisive step. CLARITY would have refined the surrounding market structure, but its absence does not impair stablecoin adoption or infrastructure rollout. This is why the rationale behind our transition from Mobile Payments to Stablecoins remains unchanged.

For the broader blockchain ecosystem, the impact is also limited for the time being. Protocol development will continue. Interoperability will improve. User experience will keep converging toward mainstream standards.

What has been delayed is not progress, but the pace of institutional engagement. Some traditional players still need a CLARITY moment, similar to the GENIUS moment, to commit capital at scale. That catalyst has been postponed, but such delays often create entry points rather than structural risks for long-term investors.

We made no changes to our portfolio following this delay. In AtonRâ Blockchain, around 55% of the portfolio would directly benefit from clearer regulation. In AtonRâ Stablecoins, the entire portfolio is tilted toward deploying or integrating infrastructure, which primarily depends on the GENIUS Act. Both strategies have outperformed the main large-cap indices so far this year, with +22.6% for the former and +10.1% for the latter.