Michael Saylor: There is no need to bet on the CLARITY Act; it is more important to seize the existing regulatory window

Author: Michael Saylor

Compiled by: Jiahua, ChainCatcher

Rather than accepting the limitations in the final version of the CLARITY compromise text, the cryptocurrency industry should rely on the SEC, CFTC, U.S. Treasury, and banking regulators to support innovative rules to move forward.

The U.S. government is willing to promote the modernization of financial markets. We should take advantage of the next two years to enable more people to access better financial products.

For us, the safest path forward is to create products that users find genuinely useful and widely promote them in the market. Lower costs, lower barriers to use, more useful services, and stronger control over funds will allow users to tangibly feel the value of innovation and generate a direct motivation to maintain it. The strongest support group we can build is the public that actually benefits from these products.

Stable and clear legal rules are important, and free competition is equally important. Laws can either permanently establish a right or impose a long-term restriction. Before celebrating the long-term certainty of rules, we should first clarify what exactly needs to be fixed.
The September version of the CLARITY compromise text will restrict service providers from issuing rewards to customers: if customers only hold payment-type stablecoins, service providers cannot pay rewards solely based on that, except for qualifying activity rewards. The plan also stipulates that if the Treasury determines that community banks are experiencing large-scale and adverse deposit outflows, it can also restrict certain reward mechanisms.

Protecting banks from liquidity crises and protecting them from being replaced by more competitive service providers are two different goals. Financial stability requires sound regulation, while competition requires customers to freely choose better services. When technology reduces the cost of providing financial services, consumers should also share in the resulting savings.

Another piece of legislation, the GENIUS Act, already includes restrictions on interest or yield payments by stablecoin issuers, but its specific applicability still depends on its effective terms. After the setbacks of CLARITY, these restrictions remain in effect. The current question is whether to impose more restrictions on service providers and reward mechanisms.

Even the innovation sandbox program in CLARITY will limit the number of employees in participating companies to no more than 25 and restrict the number of projects approved by each regulatory committee to no more than 20 per year. Although these restrictions only apply to the sandbox program itself, they indicate that legislation may preemptively define the scale and boundaries of experiments before the market demonstrates its potential.

The goal should be to establish a free market for financial innovation: clear rules, open to new participants, and ample competition, allowing customers to choose freely. Protect ownership, require honest disclosure, and severely punish fraud. Within these boundaries, let entrepreneurs test better technologies and business models, allowing successful products to grow continuously.

The U.S. government has already begun to pave this road.

On September 17, the SEC utilized existing authority to provide conditional regulatory relief for on-chain trading of certain tokenized stocks. This does not mean that the related activities are no longer regulated; investor protection measures and anti-fraud provisions in securities laws remain in effect.

SEC Chairman Paul Atkins described it as a gradual process: first, let the market develop, accumulate experience from market operations, and then establish long-term rules after temporary relief.

CFTC Chairman Michael Selig supports advancing CLARITY but has also committed to using existing authority to carry out related work if the bill fails to advance. He has asked staff to study rules for leveraged or margin crypto trading through regulated markets and to collaborate with developers to explore compliant on-chain finance.

U.S. Treasury Secretary Scott Bessent links the implementation of stablecoin rules to innovation, U.S. economic growth, and the global standing of the dollar. Operable rules can translate these goals into payment, commercial, and financial services that people actually use.

The CLARITY text itself also retains the SEC's existing regulatory exemption authority. This is the key point: existing laws already provide ample room for development. We can continue to pursue these opportunities without treating new restrictions in the bill as a cost of progress.

As appropriate rules and compliant market infrastructure gradually take shape, these benefits can extend to the entire digital asset economy.

Digital Capital: Bitcoin (BTC)

The Office of the Comptroller of the Currency (OCC) has lowered regulatory barriers for banks to engage in crypto asset custody. On this basis, if further operable custody rules are established and prudently risk-managed lending services are provided, Bitcoin will be easier to hold, finance, and use as collateral. More institutional competition serving Bitcoin holders can expand market participation and enhance liquidity.

Digital Credit: Stretch (STRC)

Our flagship digital credit product STRC is a preferred stock that connects Strategy's Bitcoin financial management business with yield-seeking investors. Rules that support innovation can open up space for its broader issuance and distribution, tokenized ownership, and more convenient trading, while retaining the rights that shareholders are entitled to by law.

Compliant lending arrangements can also make STRC more suitable for use as collateral, provided that the terms are clear and risk disclosures are sufficient.

Digital Equity: Strategy (MSTR)

Increasing compliant trading venues, simplifying transfer processes, and extending trading hours can expand the participant base for Strategy common stock and improve market liquidity. More efficient access to equity capital can help Bitcoin reserve companies finance growth and develop new financial products. Modernized market infrastructure can benefit both issuers and shareholders.

Digital Exchange: Coinbase (COIN)

Platforms like Coinbase can integrate crypto assets, securities, custody, payment, and financing services into a more complete and user-friendly experience. Rules that support innovation can help appropriately regulated companies launch and integrate new products.

Wider market participation will create business opportunities for exchanges and allow customers to enjoy more competition in terms of price and service.

Digital Currency: Circle (USDC)

USDC is a regulated dollar stablecoin issued by Circle, headquartered in the U.S., which connects digital finance to everyday payments and global business activities.

Rules that support innovation can help Circle and its partners expand the use of digital dollars through faster settlements, programmable payments, and integration with financial institutions. U.S. businesses can reach new markets, and the dollar will become more useful globally.

Digital Innovation

These categories reinforce each other. Capital supports credit, equity finances businesses, exchanges connect investors with issuers, and digital currencies transfer value between them. Developers can combine these capabilities to create products that are more useful than individual components. Open competition allows more people to participate in building, more ideas to undergo market testing, and more value to ultimately reach customers.

Banks should participate in this future. They can compete around digital assets in areas such as custody, payments, product distribution, and credit backed by digital assets. Traditional institutions and new entrants should win customers by providing better products and services. This is how financial innovation improves the financial system.

Speed is important because innovation accumulates and amplifies continuously. The sooner products are launched, the sooner feedback can be obtained. Better products will attract customers, distribution channels, and investment, thereby supporting the next round of improvements. For every year we wait, users miss out on a year of actual benefits, and U.S. businesses miss out on a year of practical experience.

These benefits extend beyond the financial sector. Lower payment and financing costs can free up business resources for investment, hiring, and expansion. Faster settlements can allow funds to be reinvested sooner. Broader financial participation opportunities can connect savers with entrepreneurs. As long as U.S. businesses are given enough space to develop and push related products and services overseas, they can create global value while enhancing the U.S. economy.

A major reason to support CLARITY is that we need a law to protect ourselves from future unfriendly government actions toward digital assets.

Long-term effective laws can protect rights, and certain changes do indeed require congressional action. But no law can completely remove political factors from regulation. Future governments will still make important decisions regarding rule enforcement and regulatory enforcement. This industry also needs a sufficiently large public support group to make the political cost of unfriendly policies higher.

Imagine 50 million American voters using digital financial products that improve their lives: cheaper payment methods, convenient Bitcoin acquisition channels, genuinely useful securities products, transparently structured yield products, and credit that is more competitive in price and terms.

These voters will have concrete things to defend. Limiting a technology that has not yet become widespread is politically different from depriving millions of users of the services they rely on. Future governments must explain why these customers should lose the benefits they already enjoy.

The goal should be to have 50 million truly satisfied users, giving them a direct motivation to maintain the freedom of financial choice. The larger the user base, the higher the political cost of policy reversals. Sound rule-making can solidify the legal foundation. Both things must be done.

When products have not yet emerged, there are no customers to speak for them. Once products are widely used, households, businesses, advisors, developers, and banks can articulate what they want to see preserved. The actual value validated by the public enhances the industry's position in legislation more than promises of what might be created in the future.

User recognition must be earned through products. Products should be useful, understandable, and reliable regardless of market conditions. Transparent terms, honest risk disclosures, convenient user experiences, and the right to freely switch service providers all help build trust. Broad deployment of products can then translate this trust into lasting support.

We should take advantage of the years 2027 and 2028 to scale up truly useful products, transform temporary relief into long-term rules, and promote targeted legislation in areas that genuinely require additional authorization or protection. The measure of success is how much value we create for customers and the economy.

Let the digital asset industry innovate rapidly in a free market, creating as much value as possible for the U.S. economy and the global economy. Create products that users are willing to use and can benefit from, widely promote them in the market, and give millions of people a reason to uphold the competition and innovation that make these products possible.
Only by enabling more people to truly use digital innovations and benefit from them can the industry gain broad public support and achieve more lasting protection.