The CLARITY Act, GENIUS Act, MiCA, AI & More: Digital Assets Thoughts Of The Week

Regulation was on digital assets’ minds this week. They shared their thoughts on the CLARITY and the GENIUS Act and how they compare with the European Union’s MiCA regulation [Markets in Crypto Assets]. Other topics included AI and investing.

Markets and investing

“Capital is beginning to concentrate around infrastructure because that’s ultimately what determines how quickly markets can mature.


”Clear rules don’t create innovation on their own, but they make it far easier for innovation to scale.

”Institutional adoption rarely happens in isolation. Confidence in one part of the market usually strengthens the rest of the ecosystem.

“AI will accelerate finance, but trust will continue to determine where capital flows.”

“The next phase of digital finance will be defined by the quality of the infrastructure supporting it, because that’s ultimately what gives markets the confidence to grow.”

– Edwin Mata, co-founder and CEO, Brickken

“Markets are in a bit of a tug-of-war this week as macro and crypto-specific signals pull in opposite directions. Bond traders are increasingly pricing in the possibility that the Fed could start rate hikes up again as soon as this fall, a scenario that would mark the first tightening cycle since 2023 and one that historically Bitcoin does not take lightly.

“But at the same time, stablecoin reserves on major exchanges have continued to drain, with billions of dollars in outflows from Binance and Bybit over the past month, a sign that investors still aren’t ready to begin stacking again. Moreover, there is renewed geopolitical pressure from the collapsed Iran ceasefire and inflation risk from rising oil prices, keeping risk appetite in check. The market is currently caught between hawkish rate expectations and cautious positioning, with participants waiting for clearer direction before committing fresh capital.

“Yet, short-term price tells you very little about where the industry actually is. Macro will move price action and onchain volume, but that’s the wrong metric to evaluate the industry on. When Amazon lost 90% in the dot-com bust, Bezos wasn’t worried because the internal numbers were growing faster than ever. That’s how it feels from inside crypto right now, and the trends numbers back it up.

“The Clarity Act hasn’t passed yet, but both parties are now behind clear rules for crypto, and every step gives the industry firmer ground to build on. Institutional heavyweights from Coinbase to BlackRock continue to build out infrastructure regardless of short-term price swings, major influencers like Arthur Hayes are stepping back into the market with fresh purchases, and tokenization volumes on networks like Solana are hitting records, pointing to real-world utility that goes beyond speculation.

“Historically, periods of maximum macro pressure and capitulation have often set the stage for the strongest recoveries, and this cycle’s combination of deepening institutional adoption, clearer regulation on the horizon, and expanding onchain use cases suggests we’ve likely passed the point where this reverses – the industry we’re building is on the path to inevitable, or already there.”

 – Diogo Cassinelli, sales and partnerships manager, Trace Finance

The CLARITY Act vs. MiCA

“Structurally, the two pieces of law are built very differently. MiCA is issuer-centric and disclosure-first, meaning that you can file a compliant whitepaper, meet conduct and reserve rules, and offer a token to EU retail users without ambiguity about its status. 

“However, CLARITY takes a classification-first approach, splitting jurisdiction between the SEC and CFTC based on decentralization and economic characteristics, with a safe harbor for tokens distributed to end users rather than sold to raise capital. That safe harbor is genuinely more permissive than anything MiCA offers for reward or utility tokens, but it only helps once the bright lines it draws are law rather than a proposal.

“It is also worth remembering that CLARITY is only half of the US answer to MiCA; the GENIUS Act already covers stablecoins, so market structure is the missing piece, not the whole framework.

“Calling it a national security tool is really about onshoring activity that would otherwise be offshore, and on paper CLARITY’s end-user distribution carve-out could make the US more innovation-friendly than MiCA once finalized. But a bill only becomes a counterweight when it is enacted and enforced consistently. CLARITY has passed the House and cleared the Senate Banking Committee, yet it still sits on the Senate calendar awaiting a 60-vote floor test before the August recess. Until it crosses that line, firms are operating off SEC-CFTC interpretive guidance that could potentially be reversed by the next administration. 

“This is really an extension of a muscle many compliance teams have already built over the past two years: running two tracks in parallel instead of waiting for the final text.

“On the banking side, that anticipation has already been validated; the Senate Banking text adopted a compromise restricting passive, deposit-like yield on payment stablecoins while preserving room for transaction-based rewards under tighter oversight, precisely the line firms had been structuring toward, with activity rather than balances, anticipating that any compromise lands close to that line.

“On the ethics side, the practical impact is less about officials themselves and more about counterparty screening. If Congress restricts officials’ crypto holdings, firms need enhanced due diligence to flag politically exposed relationships, extending existing AML-style screening to cover crypto holdings and family members.”

– Amanda Peçanha, chief compliance officer, Trace Finance

“From my perspective, the CLARITY Act is positioned to become the global standard rather than just one framework among many. The reality is that other markets tend to test financial regulations while American markets ultimately set them, and I think crypto will follow that same pattern.

“Europe deserves credit for moving first with MiCA and proving that comprehensive digital asset rules can work, but in practice the rest of the world has always calibrated to where American capital markets land because that is where the depth, the innovation and the bulk of the world’s financial infrastructure sits. Once the US codifies clear rules through the CLARITY Act, I expect other jurisdictions, including Europe, to converge toward that benchmark rather than the other way around, simply because global firms cannot afford to operate outside the market that sets the pace.

“If the legislation is implemented well, it does not create an isolated regulatory island at all. It establishes the reference point that everyone else measures themselves against, and over time that gravitational pull is what turns an American law into the effective worldwide standard.

“The reality is that compliance teams have become accustomed to preparing for uncertainty because regulation almost always evolves in stages rather than arriving fully formed. Most institutions are already investing heavily in stronger governance, transaction monitoring, identity verification and audit capabilities because those foundations remain valuable regardless of how individual provisions change during the legislative process.

“Questions around banking stability and ethics rules for public officials may dominate the political debate, but for firms building real financial infrastructure the priority remains exactly the same, which is demonstrating transparency, managing risk effectively and proving that systems can operate safely under regulatory scrutiny and the reality is that the companies that invest in those capabilities today will be in a far stronger position when the final framework is settled.

“I don’t believe stronger conflict of interest rules would discourage serious institutional participation because institutions generally welcome clear governance standards that increase confidence in the market. If anything, having well-defined disclosure requirements and clear boundaries around public officials can remove uncertainty that otherwise creates unnecessary political risk. Compliance teams already manage extensive disclosure, reporting and governance obligations across traditional finance, so these processes are familiar territory even if the specifics evolve.”

– Ryan Kirkley, co-founder and CEO, Global Settlement Network

“Clarity is meant to deal with market structure and centralized parties, so it was puzzling to me that DeFi provisions were part of this bill at all. That said, the industry has done a lot of hard work to make sure developer protections are built in the right way, and that effort has paid off.

“Going forward, the priority is making sure the Blockchain Regulatory Certainty Act is embedded in the final text, so that developers and non-custodial software have clear, durable protection.

“I think one thing Europe did smartly with MiCA is punt the DeFi question rather than legislate it prematurely — they recognized DeFi needs more study before you can regulate it well. I would have liked to see the U.S. take a similar approach and focus Clarity on setting bright-line rules for centralized players first. But given DeFi provisions are part of the conversation now, the focus is on getting the protections right, especially locking in the Blockchain Regulatory Certainty Act language.” 

– Cathy Yoon, general counsel, Temporal

“If federal officials are prevented from issuing or promoting their own digital assets, it reduces perceived conflicts of interest and helps separate public policy from private financial gain. That’s important because payment networks depend on trust, predictable regulation, and neutral infrastructure rather than political influence.

“As stablecoins and blockchain-based payments become more widely used, businesses and consumers need confidence that the rules governing digital assets are being written for the broader market, not individual beneficiaries. Clear ethical boundaries could ultimately encourage greater institutional participation, accelerate payment innovation, and support broader adoption of decentralized payment infrastructure.”

– Joshua Kim, founder and CEO of DonaFi

“The crypto industry needed Trump to do one fairly simple thing: end the legal antagonism toward legitimate builders and provide clear rules of the road. Instead, he used the presidency to enrich himself through some of the most cynical and extractive parts of crypto, creating an extraordinary conflict of interest and handing the industry’s critics their strongest possible argument.

“I initially supported crypto figures courting him before the election, but in retrospect, he was the worst possible person to open that door. A ban on federal officials issuing or sponsoring digital assets is now both necessary and deeply regrettable—because it is addressing a problem Trump himself created.”

– Dylan Dewdney, co-founder and CEO of Kuvi.ai

The GENIUS Act

“The question worth asking now is whether the yield restriction serves the Act’s stated goal, or creates an unintended gap that works against it. If compliant products cannot offer yield while offshore and DeFi platforms still can, we are looking at a global stablecoin system with different tiers.

“The irony is that yield-seeking users may move to non-US market providers without the strong regulatory guardrails that the GENIUS Act now brings. This could potentially allow competitors of US-based stablecoin providers to take advantage. That consequently leaves US consumers with some tough choices.

“A smarter rulebook would allow compliant stablecoins to compete on equal terms and keep that demand inside the regulated market. The EU offers a useful data point here: Brussels is already reopening MiCA to address gaps exposed by fast-moving global stablecoin markets, including how the framework treats non-EU issuers. If Europe is willing to revisit its rules as the market evolves, Washington should be prepared to do the same rather than treating the yield restriction as untouchable.”

– Konstantins Vasilenko, co-founder and CBDO, Paybis

AI and investing

“People are not confused about what they want from AI. They want it doing the work nobody enjoys, not making the calls that decide their retirement. Hand a decision like that to a machine without a person standing behind it, and you’ve not modernized the relationship; you’ve probably ended it.

 “Someone using an AI tool is not the same as someone trusting it with their future. People will experiment. They will not forgive a mistake made by something they never agreed should be deciding anything in the first place.
 
“Every wealth firm racing to launch an AI product needs to ask a harder question first. Are you building something clients will actually let near their money, or something that looks impressive in a boardroom demo and empties out a client book within a year?
 
“People will hand AI their questions. They will not hand it their future, not without a person they trust holding the other end of the conversation. Any firm still betting otherwise is about to find out the hard way.”

– James Green, regional director, deVere Group