What will happen to the cryptocurrency market if the critically important crypto law, the CLARITY Act, is not adopted?

Although the fate of the CLARITY Act, a long-awaited initiative in the cryptocurrency sector, remains uncertain, experts warn that failure to pass this law will further deepen the existing regulatory vacuum.

Industry representative Katherine Kirkpatrick explained with a concrete example what could happen if the law is not adopted:

“What happens if CLARITY is not passed? We are already seeing what will happen. The Securities and Exchange Commission (SEC) has sent the White House its guidance on how existing securities laws should apply to crypto assets.”

This statement reflects steps taken by the U.S. Securities and Exchange Commission (SEC) to classify crypto assets under traditional securities regulation rules. According to experts, such guidance suggests a continuation of the “regulation by enforcement” approach in the absence of appropriate legislation.

The CLARITY Act is known as a bill aimed at clarifying several issues, including:

• the classification of crypto assets;
• the division of authority between the SEC and the CFTC;
• staking rewards;
• stablecoin yield.

If the law is adopted, assets such as Bitcoin and Ethereum will be considered commodities, rather than securities.

The ability to offer yield on stablecoins would remain in place, although this provision remains controversial due to objections from banks.

The bill is being blocked by the banking lobby, which argues that stablecoin yields threaten traditional bank deposits. During meetings at the White House in February, banks claimed that stablecoin yields could lead to deposit outflows, which has delayed the adoption of the law.

Although prediction platforms such as Polymarket estimated the probability of the bill passing at 90%, the March deadline was missed, and discussions were postponed until April.

According to experts, the failure of the CLARITY bill could plunge the cryptocurrency market into uncertainty.

SEC guidance sent to the White House, which subjects crypto assets to existing securities laws, could lead to a wave of lawsuits.

This could also drive innovation abroad.

Additionally, a ban on stablecoin yields could weaken the DeFi ecosystem and trigger forced liquidations of leveraged assets.

Some analysts predict that in such a scenario Bitcoin and other cryptocurrencies could face price declines.

See also: "The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are preparing an important agreement in favor of cryptocurrencies! This was announced by SEC Chairman Paul Atkins"

#CLARITY Act #U.S. Securities and Exchange Commission (SEC)

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