Layer One: What the CLARITY Act could mean for crypto in 2026

Welcome to Layer One: the podcast and newsletter on the intersection of crypto and the real world. Hosted by Steven Gates and Kelvin Sparks, Layer One brings you inside the conversations driving blockchain forward.

Last week, we invited Anthony Scaramucci, founder of SkyBridge Capital, onto the podcast to discuss the outlook for crypto in 2026 and beyond. In this edition of the Layer One newsletter, we’re taking a closer look at the specific regulatory developments slated for the new year, and what they could mean for the industry.

Key US crypto legislation slated for early 2026

In our latest podcast episode, Anthony Scaramucci shared his recollections of the challenges faced by crypto industry lobbyists over the past few years. Advocates for blockchain adoption were repeatedly forced into confrontation with an obstinate establishment, fronted by crypto-skeptical figures like Senator Elizabeth Warren and ex-SEC Chair Gary Gensler.

Under the guidance of the latter, the Securities and Exchange Commission launched investigations into dozens of high-profile crypto protocols, including Aave and XRP, under the presumption that a majority of digital assets qualified as securities. This aggressive “regulation by enforcement” was the established norm; the commission had no stated plans to offer further clarifications or concessions to the crypto industry.

How things can change in a year.

Donald Trump’s return to the White House at the beginning of 2025 brought about a complete paradigm shift. Now just twelve months later, the new SEC Chair Paul Atkins is predicting that all US markets could move towards tokenization within as little as two years.

As outlined in The Block's 2026 Digital Assets Outlook report, Atkins’ SEC has begun the process of establishing clear pathways for this migration of assets onchain. The process began in earnest this summer with Project Crypto: an initiative to update the agency’s policies for the new age of digital assets. Already this year they’ve issued guidelines for expedited ETF approvals, and are on the cusp of offering “innovation exemptions” for early-stage crypto projects, which will grant temporary relief from registration requirements.

Meanwhile, legislators in the House and Senate have been moving in parallel with the SEC to pass key market structure legislation. The greatest stride made thus far has been the GENIUS Act, passed in July, which established frameworks for the legal issuing of stablecoins. Things are very clearly moving in a positive direction, though perhaps not as quickly as some expected.

Several pieces of crypto legislation are still pending in the Senate, most notably the Digital Asset Market Clarity Act (CLARITY Act). This bill — called a “game changer” by Scaramucci — seeks to clearly define whether specific digital asset types are commodities or securities, delegating oversight to the CFTC or SEC respectively. Its passing could herald the next phase of convergence between blockchain and legacy finance in the United States.

As recently as July, markets were convinced with almost 90% certainty that the CLARITY Act would be written into law before the end of the year. However, some partisan jostling — not to mention the longest shutdown in US government history — pushed that timeline back. Developments which were already being priced in failed to materialize according to schedule: a potential contributing factor to the broad collapse in prices across the crypto markets in the latter half of this year.

It remains highly likely though, that the CLARITY Act will pass within the first half of 2026. On December 17, Kara Calvert, VP of US Policy at Coinbase, lauded the progress of the bipartisan cohort of lawmakers working on the bills, comparing them to a “steamroller”. She went on to suggest that a Senate vote could come as early as January.

The optimistic outlook espoused by several key industry figures, including Bitwise Chief Investment Officer Matt Hougan, is that this event will bring about a market resurgence in 2026, as more traditional finance entities gain the confidence to begin engaging with cryptoassets and DeFi. Some are even predicting new all-time highs for BTC.

In conversation with Layer One, Scaramucci voiced a similar sentiment regarding AVAX, predicting that “next year for Avalanche is going to be the year of announcements born from the CLARITY Act. It’s going to be very beneficial to the token and the DATs associated with it.”

Podcast Recap: Anthony Scaramucci on tokenizing Wall Street and why it's '1998 for Crypto' 

For more insights and analysis, check out the latest edition of the Layer One podcast. We were joined by veteran financier Anthony Scaramucci (SkyBridge Capital) and guest co-host John Wu (Ava Labs) to talk tokenization, regulation and the frontrunners to be the next chair of the US Federal Reserve.

Subscribe to Layer One on Youtube, Apple, Spotify or wherever you get your podcasts.

In the Headlines: The stories driving the conversation this week

• Senators in the US this week introduced the SAFE Crypto Act to combat fraud in the industry. The bipartisan bill aims to establish a dedicated task force, charged with tracking crypto-related financial crime trends and guiding coordinated responses from law enforcement. This comes against a backdrop of burgeoning activity among scammers. Earlier this year, authorities conducted raids against an expansive European scam network which laundered $815 million in stolen funds.
• The organizer of New York’s oldest Christmas market launched stablecoin payment options. Urbanspace, the operator behind Union Square Holiday Market, integrated USDC payments into its mobile application, powered by the Avalanche blockchain. Crucially, the users themselves don't need to know anything about crypto to participate: all of the blockchain operations take place on the back end.
• President Trump announced he will reveal his nomination for the next US FED Chair early in the new year. This could signal a move towards more dovish monetary policy when the term of the current chair, Jerome Powell, expires in May 2026. Trump added that his pick will be "someone who believes in lower interest rates by a lot, and mortgage payments will be coming down even further." 

Top of the Charts: Hassett maintains a firm lead in FED Chair odds

Keep up with the latest in tokenization, DeFi, and institutional adoption by subscribing to Layer One's weekly market insights.

Layer One is brought to you in collaboration with Avalanche.