CLARITY Act passage essential for boosting crypto market confidence, says Bessent
Treasury Secretary warns that postponing the CLARITY market structure legislation beyond the 2026 US midterm elections could substantially diminish prospects for its approval.
United States Treasury Secretary Scott Bessent believes that approval of the CLARITY crypto structure legislation would boost investor confidence during the current market downturn.
Speaking to CNBC on Friday, Bessent explained that the delay in advancing the CLARITY bill, driven by concerns raised by cryptocurrency industry leaders, has had a detrimental effect on the sector. According to Bessent:
In a time when we are having one of these historically volatile sell-offs, I think some clarity on the CLARITY bill would give great comfort to the market, and we could move forward from there.
Bessent added that "I think if the Democrats were to take the House, which is far from my best case, then the prospects of getting a deal done will just fall apart."
According to Bessent, securing passage of the legislation "as soon as possible" and delivering it to US President Donald Trump for his signature by springtime, spanning late March through late June in the United States, is critical due to the possible change in congressional control following the 2026 midterm elections.
The 2026 midterm elections could throw a wrench in Trump's crypto agenda
Joe Doll, who previously served as general counsel at non-fungible token (NFT) marketplace Magic Eden, explained to Cointelegraph that power dynamics traditionally undergo changes during US midterm election cycles.
"President Trump has a two-year unimpeded mandate that can be weakened greatly in the 2026 mid-term elections and reversed in the 2028 elections," economist Ray Dalio said in January.
Without being enshrined in legislation, the Trump administration's cryptocurrency-friendly policies could be undone by this prospective political transformation, according to Dalio's warning.
According to US House data, the Republican Party currently maintains a narrow four-seat advantage in the US House of Representatives, controlling 218 seats versus the Democratic Party's 214 seats.
On the prediction platform Polymarket, 47% of participants forecast a divided government outcome in the 2026 midterm elections, where each major party secures control of a single congressional chamber.
At the time of publication, Polymarket indicates a 37% probability that the Democratic Party will achieve a complete victory, gaining majority control in both the House of Representatives and the Senate.