“Clarity Would Give Great Comfort”: Bessent Says Passing Crypto Market Structure Bill Will Boost Bitcoin Price

Treasury Secretary Scott Bessent told CNBC on Friday that passing the stalled Clarity Act—the long-debated crypto market structure bill—would provide “great comfort” to markets amid Bitcoin’s historic volatility.

With Bitcoin down nearly 50% from its October 2025 all-time high and Ethereum suffering even steeper losses, Bessent called the current deadlock “self-induced,” blaming a group of crypto firms for blocking legislation that could restore investor confidence. The bill now faces a tight timeline, with lawmakers warned that if Democrats win the House in November’s midterm elections, the “prospects of getting a deal done will just fall apart.”

Bitcoin’s 50% Plunge and the Regulatory Void

If you’ve been watching Bitcoin’s price action since October 2025, you know it’s been a brutal stretch. The world’s largest cryptocurrency hit an all-time high near $126,000 in October, only to shed nearly half its value in the months since. As of February 14, 2026, Bitcoin trades around $68,500—a 46% decline that has left even seasoned investors nursing losses .

Ethereum has fared even worse. The second-largest cryptocurrency by market capitalization now sits at approximately $2,050, a staggering 58% drop from its August 2025 high of $4,946 . The broader crypto market has lost hundreds of billions in value, with the October liquidation event—the largest in Bitcoin’s history—wiping out $19 billion in leveraged bets in a single day .

Into this environment steps Treasury Secretary Scott Bessent, who on Friday made his most direct comments yet about what’s needed to stabilize markets.

“Bitcoin has a history of volatile movement,” Bessent told CNBC. “But part of the volatility here is self-induced: there is a group of Democrats who want to work with Republicans on getting a market structure bill—it’s called the Clarity bill—but there are a group of crypto firms who have been blocking it” .

What Is the Clarity Act? Understanding the Stalled Crypto Market Structure Bill

The Clarity Act (formally H.R. 3633) represents the most ambitious attempt yet to create a comprehensive federal regulatory framework for digital assets in the United States. The bill passed the House in 2025 and was sent to the Senate, where it was received and referred to the Senate Banking Committee on September 18, 2025 .

Key Provisions of the Clarity Act

The legislation aims to accomplish several critical objectives:

Clear Regulatory Jurisdiction: The bill explicitly defines when digital assets fall under SEC versus CFTC oversight. Tokens that achieve sufficient decentralization can be classified as “digital commodities” under CFTC authority, while those that remain dependent on a central promoter’s efforts may be treated as securities .

Protection of Self-Custody: The bill includes explicit language protecting consumers’ rights to maintain hardware or software wallets and engage in direct peer-to-peer transactions without intermediary oversight .

DeFi Carve-Outs: The House text includes headings that carve out “DECENTRALIZED FINANCE ACTIVITIES NOT SUBJECT TO THIS ACT” in amendments touching both the Securities Exchange Act and the Commodity Exchange Act, making DeFi scope a deliberate drafting choice rather than an afterthought .

Stablecoin Rules: The bill establishes rules for “payment stablecoins,” including provisions about reserves, redemption rights, and—most controversially—whether issuers can share interest income with holders .

Bank Integration: Banks and credit unions would be explicitly permitted to offer crypto custody services, issue stablecoins, and use distributed ledger technology in their operations, provided they do so safely .

Investor Protections: The legislation strengthens anti-money laundering requirements, creates bankruptcy protections ensuring customer assets aren’t lost in exchange failures, and establishes disclosure requirements for crypto issuers .

The Stablecoin Yield Battle: Why Coinbase Pulled Its Support

The path to passage hit a major roadblock in January when Coinbase, the largest U.S. cryptocurrency exchange, withdrew its support for the bill. CEO Brian Armstrong made the announcement after reviewing the Senate Banking Committee’s draft, and his criticism was blunt.

“We’d rather have no bill than a bad bill,” Armstrong said, citing multiple concerns with the proposed legislation . These included what he described as a “de facto ban on tokenized stocks,” restrictions on decentralized finance, provisions giving the government “unlimited access to your financial records,” and language that would “kill stablecoin rewards” .

The stablecoin rewards issue has emerged as the primary sticking point. Here’s why it matters.

How Stablecoin Rewards Work

When you hold USDC on Coinbase, the exchange currently offers “3.50% rewards on USDC” through its Coinbase One subscription . This yield comes from the interest Coinbase earns on the reserve assets backing those stablecoins—primarily U.S. Treasuries and cash equivalents.

The banking industry sees this as a direct threat. Community bankers have warned that if stablecoin rewards continue unchecked, consumers will move their deposits from banks to crypto platforms, potentially draining billions from the traditional banking system .

The $6.6 Trillion Question

The Treasury Department reportedly estimated that under certain assumptions, widespread stablecoin adoption could draw down as much as $6.6 trillion in bank deposits . While analysts caution that this figure represents a scenario output rather than an observed flow, it has nonetheless become a rallying cry for banking industry opposition.

Banking executives argue that unless Congress bans stablecoin rewards, people will park their money on crypto exchanges rather than banks, limiting banks’ ability to lend to U.S. businesses .

Coinbase and its allies counter that stricter limits will curb innovation and tilt the playing field in favor of traditional financial incumbents. The company reported $247 million in Q4 revenue from stablecoins alone, plus another $154.8 million from blockchain rewards—making the stakes existential .

The Clock Is Ticking: Why Spring 2026 Is the Deadline

Bessent’s urgency reflects a cold political reality: the window for passing crypto legislation is narrower than it appears.

The Midterm Election Threat

Republicans currently hold a razor-thin majority in the House, with 218 seats to Democrats’ 214—a margin of just four votes . History suggests that the party controlling the White House typically loses seats in midterm elections. If Democrats flip the House in November 2026, the legislative landscape changes completely.

“If Democrats win the House—which is far from my base case—the prospects of getting a deal done will just fall apart,” Bessent warned .

Ray Dalio, the billionaire investor, made a similar prediction in January: “President Trump has two years of unobstructed governance, but this could be significantly weakened in the 2026 midterm elections and reversed in the 2028 election” .

The Spring Window

Bessent has been explicit about the timeline: the bill needs to reach President Trump’s desk “this spring” . In practical terms, that means before the congressional August recess at the latest, and ideally before the midterm campaign season fully consumes lawmakers’ attention.

White House crypto advisor Patrick Witt put it even more starkly: “There’s a window of opportunity. It’s still open, but it’s closing quickly” .

Who’s Blocking, Who’s Pushing: The Battle Lines

The Opposition

Coinbase remains the most visible opponent. Beyond Armstrong’s public statements, the exchange’s lawyers have been actively negotiating, with reports indicating that meetings this week were “productive” and that “progress was made” . But the fundamental disagreement over stablecoin yields persists.

Banking Groups have lobbied aggressively for restrictions. A coalition of community bankers recently urged Congress to amend the GENIUS Act (a related stablecoin bill), arguing that stablecoin issuers are exploiting a loophole to pass interest-like returns to holders indirectly .

Some Crypto Firms beyond Coinbase have also expressed reservations. Bitwise Invest’s research director called the current draft “bad for tokenization, stablecoins, DeFi, privacy, developers, users, investors, and innovation” .

The Supporters

The Trump Administration is all-in. SEC Chair Paul Atkins has voiced strong support, stating: “This bill aligns with the President’s strategic priority of making America the world’s crypto capital. With clear legislation and rules, markets have certainty. We fully support it” .

Senate Banking Committee Chair Tim Scott has championed the legislation, arguing it gives “ordinary Americans the protections and certainty they deserve” .

Ripple CEO Brad Garlinghouse remains optimistic that “these issues can be resolved through the markup process,” calling the bill “a significant step forward in providing a practical framework for crypto while continuing to protect consumers” .

The Prediction Markets

Polymarket traders currently give the Clarity Act approximately a 62% chance of being signed into law by the end of 2026 . That’s down significantly from early January, when odds topped 80% . The decline reflects growing recognition that industry pushback and political headwinds could derail the legislation.

What Passage Would Mean for Bitcoin and Crypto Markets

The Immediate Impact

Bessent’s core argument is simple: regulatory clarity would reduce uncertainty, and reduced uncertainty would support prices.

“So in a time when we are having one of these historically volatile selloffs, I think some clarity on the Clarity bill would give great comfort to the market, and we could move forward from there,” he said .

Bitwise CIO Matt Hougan expects a “sharp rally” if a workable version of the Clarity Act passes, as investors would immediately price in the guaranteed expansion of blockchain finance .

The Long-Term Stakes

Beyond immediate price action, the bill would cement the current pro-crypto regulatory environment into permanent law. Without it, the industry remains vulnerable to the whims of future administrations .

Hougan argues that if the legislation stalls, crypto must follow the path of disruptive giants like Uber and Airbnb, which survived regulatory grey areas by becoming too popular for lawmakers to ignore. He suggests the industry has roughly three years to make stablecoins and tokenized assets indispensable to the American economy. If it succeeds, favorable regulations will follow by necessity. If it remains on the fringes, a change in Washington could prove disastrous .

The Implementation Reality

Even if the bill passes, don’t expect everything to change overnight. Paradigm’s regulatory affairs VP Justin Slaughter notes that because the bill would require the creation of 45 separate rules, “the implementation process could extend not only through this presidential term but potentially through the entire next presidential term” .

That means the benefits of clarity will phase in gradually, not all at once.

The Path Forward: What Happens Next

The March 1 Deadline

Crypto executives and banking chiefs now have until March 1 to reach an agreement on the market structure bill . That’s just two weeks away—an incredibly tight timeline for resolving disputes as fundamental as whether stablecoin rewards should exist at all.

The White House Meetings

Stakeholders have been meeting regularly, with sessions at the White House convening crypto executives, banking representatives, and regulators. The February 10 meeting was framed by some observers as a step toward breaking the logjam, though participants emerged without a definitive agreement .

The Compromise Scenarios

Based on public reporting, a partial compromise appears plausible. Programs branded as “rewards” could survive if tied to activity or membership constructs (like Coinbase’s subscription model), while passive balance-based payouts might be constrained by statutory definitions . This would shift product design toward payments rails, card programs, and usage incentives rather than simple APY for holding.

The Risk of Failure

If the bill fails, the consequences extend beyond regulatory uncertainty. Wall Street broker Benchmark argues that failure would delay—not derail—crypto’s maturation, but would leave the U.S. market operating below its potential. Investors would likely favor bitcoin-centric exposure, strong balance sheets, and cash-flowing infrastructure over regulatory-sensitive segments such as exchanges, DeFi, and altcoins .

The Bottom Line: Why This Matters for Your Portfolio

For investors watching Bitcoin tumble from all-time highs, Bessent’s message is worth hearing: the current volatility isn’t just about macroeconomics or technical factors. It’s partly “self-induced”—the result of industry infighting delaying legislation that would provide the regulatory certainty markets crave.

The Clarity Act represents the best chance in years to establish a comprehensive federal framework for digital assets. It would clarify which agency regulates what, protect self-custody rights, provide rules for stablecoins, and give traditional institutions a clear path to participate.

But it faces two existential threats: internal industry disagreement over stablecoin yields, and an external political calendar that could shut the window entirely after November’s midterm elections.

If the bill passes this spring, Bessent believes it will “give great comfort to the market.” If it doesn’t, the industry faces years of continued uncertainty, and Bitcoin’s recovery from its 50% drawdown may take considerably longer.

The next two weeks will tell us which path we’re on.