Weekly Crypto Briefing: CLARITY Act — Good, Bad, Ugly

January 16, 2026

Chris Campbell

James Altucher's Early-Stage Crypto Investor

Banks don’t make money because they’re good at customer service.

They make money because they perch between depositors and Treasuries.

Banks sit upstream of yield. Depositors provide the water. Treasuries set the slope. The flow runs through the bank, and most of it never reaches the depositor.

Stablecoin issuers threaten that arrangement.

They take dollars. They buy Treasuries.

Simple.

That means they could hand most of the yield back to users and still be profitable.

If stablecoins are allowed to pay yield, deposits move. If deposits move, banks lose leverage. If banks lose leverage, the system changes.

That dynamic is embedded in the CLARITY Act debate right now.

But it’s only a part of it.

Today, let’s run through what’s happening now based on our full reading of the new draft of the bill.

Good, bad, and ugly.

Then, we’ll go into one “loophole” that will instantly benefit a select few tokens.

Before we go there, though…

We won’t be having a live call on Monday since it’s a federal holiday. So our next live ESC call will be the following week, on January 26.

Why the Bill Suddenly “Got Complicated”

The CLARITY Act is supposed to define jurisdictions… not stablecoin rules.

Anything that behaves like a commodity? Straight to CFTC. Anything that moves like a security? SEC.

And the original bill, as it passed through the House, was well-received by the crypto industry.

The new draft, released this week, is not what it once was, expanding its scope.

That’s, in part, why Coinbase pushed back this week. According to CEO Brian Armstrong, the revised draft risks:

Functionally banning tokenized equities (translation: fails to provide a clear path for them to exist)

Expanding surveillance obligations (translation: anything not fully decentralized gets treated like Coinbase)

Weakening the CFTC’s role (SEC holds the power)

And quietly kneecapping stablecoin yield while pretending not to

Let’s start with the good news, because there is good news here.

The Good

The market structure bill will set the rules by which every crypto asset—present and future—will be classified, traded, and governed.

So getting it right is crucial.

First, credit where it’s due: this is the first serious attempt to stop treating crypto like a regulatory crime scene.

Builders get protection for writing and publishing code. Running nodes, deploying smart contracts, maintaining open-source infrastructure—those acts stop being legally radioactive as long as you’re not controlling user funds.

That’s a big deal for keeping developers and talent in the USA, and it ripples outward to everyone who relies on those systems.

Self-custody is explicitly preserved. Users keep their keys. Investors aren’t forced into third-party custody. Builders aren’t required to redesign everything around intermediaries just to satisfy outdated assumptions.

There’s also a real attempt to clean up the industry’s credibility problem. Limits on insider dumping, clearer disclosures, and better bankruptcy recovery rules make it easier for legitimate projects to raise capital and for users to trust platforms.

Banking integration moves forward. Easier on-ramps, clearer rules for banks touching crypto, portfolio margining, tokenized real-world assets. That helps users move money, investors allocate capital, and projects scale without living in regulatory limbo.

And this one’s a bit mixed…

Projects benefit from an “ancillary asset” framework, which gives decentralized tokens a runway instead of forcing them into full SEC registration from day one (like a traditional IPO under the Securities Act of 1933).

That helps teams ship, investors evaluate real utility instead of legal gymnastics, and users actually access products without everything getting geofenced. It’s an improvement on the Gensler era, but it’s not perfect.

Zoomed out, the bill does seem to still be trying to keep crypto talent and infrastructure in the U.S.

Standards coordination, long-term security thinking, even quantum-resistance talk—it’s an admission that crypto isn’t going away.

BUT…

The Bad

Clarity doesn’t come free.

Compliance increases across the board. Projects with centralized or semi-centralized elements face more disclosures.

Semi-centralized DeFi platforms deal with heavier KYC and AML. These are projects that retain practical centralized elements—like team-held upgrade keys, centralized oracles, or controllable front-ends/interfaces—despite operating on-chain smart contracts. This creates unnecessary friction (and will do very little to actually protect consumers).

(The positive? There’s a mad rush in DeFi to limit those pain points now and decentralize completely.)

There’s a lot of “we’ll study this later” baked in. DeFi risk. Stablecoins. Mixers. That means rulemaking uncertainty during implementation. Builders don’t know exactly where the lines land. Investors can’t fully price regulatory risk. Users live with shifting rules.

The Ugly

This is where things can go sideways.

Stablecoin yield ban. The draft prohibits exchanges and issuers from offering passive yield or "rewards" simply for holding stablecoins (e.g., USDC interest on idle balances). It allows activity-based incentives (e.g., tied to transactions, liquidity provision, or payments) but effectively closes what banks called a "loophole" from prior stablecoin laws.

Heavy restrictions on tokenized equities. New rules provide no clear path to issuing tokenized stocks/securities on-chain.

Regulatory tilt toward SEC. The Senate version shifts more authority to the SEC (heavier disclosures, securities treatment) over the industry-preferred CFTC commodity path. This could allow more Gensler-style “regulatory by enforcement” to creep back in.