The cryptocurrency industry will continue expanding even if the long-awaited U.S. Clarity Act fails to advance before Congress begins its August recess, according to Bitwise Chief Investment Officer Matt Hougan.
In a blog post published Tuesday, Hougan argued that while the legislation would benefit the digital asset industry, its failure would not derail crypto’s long-term growth. Instead, he believes the U.S. Securities and Exchange Commission (SEC) could fill much of the regulatory gap through rulemaking under current leadership.
The comments come as lawmakers face a narrow window to move the Clarity Act through the Senate before the chamber begins its summer recess from Aug. 10 through Sept. 11.
Clarity Act Faces Tight Timeline
The Senate has only a few days to act before lawmakers leave Washington, making this week a critical period for one of the crypto industry’s most closely watched regulatory proposals.
Hougan warned that if the bill fails to pass before the recess, it could enter what he described as a “walking dead” phase—remaining technically alive but facing lengthy delays. He suggested the legislation could return later this year or even be folded into a broader year-end omnibus package.
Such delays, he said, would prolong regulatory uncertainty and may discourage institutional investors waiting for clearer rules before expanding their crypto exposure.
SEC Could Advance Crypto Rules Without Congress
Despite concerns surrounding the bill’s future, Hougan believes the SEC is positioned to move forward independently.
He pointed to recent remarks from SEC Chair Paul Atkins, who indicated the agency is prepared to issue regulations addressing many of the same issues covered by the Clarity Act.
According to Hougan, SEC-led regulation could initially prove even more favorable to digital asset innovation than bipartisan legislation. However, he acknowledged that agency rules are more vulnerable to changes under future administrations than laws passed by Congress.
Traditional Finance Deepens Crypto Commitment
Hougan argued that the industry’s momentum has already reached a point where it will be difficult to reverse.
He noted that major financial institutions, including BlackRock, Nasdaq, JPMorgan, and Visa, have significantly expanded their involvement in blockchain technology and digital assets. Even if regulatory leadership changes in the future, he believes years of continued industry development would make it increasingly difficult to roll back adoption.
Meanwhile, prediction market Polymarket currently estimates only a 23% probability that the Clarity Act will become law before the end of 2026, a sharp decline from roughly 75% in mid-May.
Political disagreements continue to complicate negotiations, with debates surrounding President Donald Trump’s reported crypto conflicts of interest and proposals to prohibit sports-related prediction markets.
Conclusion
While Matt Hougan maintains that passing the Clarity Act would strengthen the U.S. crypto industry, he argues that blockchain adoption is no longer dependent on a single piece of legislation. Whether through Congress or SEC rulemaking, he believes the regulatory framework will continue evolving as institutional adoption accelerates.
