“The hardest thing to learn in life is which bridge to cross and which to burn.” – Bertrand Russell
IN THIS NEWSLETTER
No CLARITY for now
The Fed whispers
Term of the day: Federal funds rate
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Issuance and trading tell two different stories. Solana executes 74% of measured onchain fixed-income spot volume, almost all from private credit. Meanwhile, products like BlackRock’s BUIDL have grown more through issuance than secondary trading. Measuring RWA adoption requires looking beyond TVL and market cap.
Read the full report: Solana RWA Ecosystem.
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WHAT I’M WATCHING
No CLARITY for now
Well, that was disappointing. We all knew that passage of the CLARITY Act before the midterm elections was a long shot (the prediction markets had the odds at around 15%) – but it would have been clarifying to at least get a final version of the bill on which to vote.
Yesterday, the Senate voted to not invoke cloture, which technically means the debate on the Act’s provisions continues. It does not mean the bill is dead… but the timing means passage is now unlikely. As of next week, congressional attention turns to the midterm elections. And once the dust settles on those, the Senate and the House of Representatives are likely to be controlled by the Democratic Party – Polymarket currently puts the odds of this at 57%.
This doesn’t mean there will be no crypto market infrastructure bill. Many Democrats supported CLARITY and worked hard to bridge the partisan divide. Reports early yesterday suggested that Senator Kirsten Gillibrand (D - NY) was urging other Democrats to vote in favour of invoking cloture – but in the end, she voted against. I’m not sure what happened there, but we can safely assume she is open to a reasonable framework codified in law, and she is not up for re-election until 2030. Other Democrats who had been in favour of moving the bill forward (such as Senators Alsobrooks and Gallego) also voted no yesterday. That doesn’t mean they don’t support the idea of reasonable regulation.
Indeed, the text of the bill was obviously problematic. It’s not just that all Democrats and the two independent senators voted against – even three Republican senators voted no on substance (Collins, Hawley and Moran).
It looks like the immovable obstacle was the language around officials’ personal interests in crypto ventures. This had become stricter but apparently not enough as Republicans could not get the White House to agree on a divestiture requirement. For the next attempt in a Democrat-controlled Congress, that will matter less, which could lead to a better bill – most voters can get behind the idea of preventing officials from getting rich on sectors they can influence.
