The Senate voted down the Clarity Act 49 to 50. Coinbase and Circle got hit hardest in the selloff — Circle down over 11%. And then just days later, the SEC approved a new way to trade tokenised stocks on-chain with a five-year innovation exemption. Joining me to discuss this is Shah Ramezani, Founder and CEO of Noah, a stablecoin payments infrastructure provider.
Thank you for having me, Johnny.
When the Clarity Act failed, what actually happened and how did the community respond?
The Clarity Act not passing through the Senate was kind of expected. It was quite complicated — there were a lot of difficulties in terms of getting everyone aligned. But we already knew before that the CFTC and SEC were prepared to come out and be clear about how they want to regulate it. We had the GENIUS Act last year, which basically defined what a stablecoin is. The Clarity Act was really here to differentiate what the SEC is responsible for versus the CFTC — to avoid a flip-flop in the event of a change from Republicans to Democrats. This shows that the SEC and CFTC are actually quite keen on regulating crypto in a favourable way.
Why did Coinbase and Circle drop harder than Bitcoin after the vote?
They would have been the main beneficiaries of that act. They were also lobbying for it from the start. They have business lines that would have been positively impacted. But it is also a market reaction — there were speculators betting that if the Clarity Act passes, the stock goes up. In the grand scheme of things, I do not think it changes anything fundamentally.
What actually sank the bill?
I do not think it was because of the kids crypto ventures. It was more the details around the ethics rules. Democrats wanted to make sure they were challenging the way the White House is dealing with crypto gains on their behalf. What happened is that the alignment on how the enforcement of the ethics rules would work failed. That is why Democrats did not come on board.
The SEC then approved tokenised stock trading on-chain. What does that actually mean?
Take a step back. Stablecoins enabled us to distribute dollars around the world much faster — growing from almost nothing to a $330 billion market cap, expected to reach $4 trillion by 2030. Now take the same analogy with stocks. If we put stocks on-chain, we can distribute them not only in the US but globally — the UAE, all these different markets. The same mechanic that got the dollar into everyone's hands, applied to equities.
What do the next 12 months look like for crypto legislation?
The Clarity Act passing now in the Senate has made the chances much lower for a vote in the coming 12 months. Both Republicans and Democrats are quite busy with midterms and then the presidential election. But I am quite hopeful — both parties are increasingly favourable toward cryptocurrencies and stablecoins. There will probably not be a vote, but the CFTC is already putting favourable regulation behind it. And Bitcoin is back at $84,000 the same week the vote failed — people realise it does not actually change anything fundamentally.
Thank you so much.
Thank you so much, Johnny.
