Summary

  • Former Chairman Patrick McHenry said the cryptocurrency industry squandered its chance to win regulatory clarity through the Digital Asset Market Clarity Act (CLARITY Act).
  • He said the CLARITY Act passed the House with bipartisan support but failed in the Senate because of a clash between Coinbase and traditional banks over stablecoin rewards, as well as delays tied to the political calendar.
  • McHenry said crypto-friendly legislative conditions ended after the Democrats retook the House and Senate, while the GENIUS Act stood as a successful example that established a federal regulatory framework for payment stablecoins.

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Former House Financial Services Committee Chairman Patrick McHenry publicly criticized the cryptocurrency industry for blowing what he called its best-ever chance to secure a comprehensive regulatory bill.

Bitcoin.com reported on November 9 that McHenry, in a November 6 interview with journalist Eleanor Terrett, said industry participants rejected a workable compromise and insisted on politically impossible terms. He said they had a chance to secure meaningful regulatory clarity but ended up with nothing.

The main bill McHenry pointed to was the Digital Asset Market Clarity Act, or CLARITY Act. The bill passed the House in July 2025 with bipartisan backing in a 294-134 vote, but was effectively killed after failing 49-50 in a Senate procedural vote in September 2026. It needed 60 votes to advance.

One of the main reasons for the bill's failure was a fight over stablecoin rewards. Coinbase Chief Executive Officer Brian Armstrong strongly pushed to allow stablecoin rewards, while traditional banks opposed the idea, viewing it as a competitive threat. Coinbase withdrew its support for the bill in January 2026 over related restrictions, leading to the cancellation of the Senate Banking Committee's review schedule. A compromise was reached in May, and Armstrong later returned to supporting the measure. But the time lost in delayed negotiations could not be recovered.

The political backdrop also shifted sharply. Democrats retook both the House and Senate in the November 2026 midterm elections, effectively ending a crypto-friendly legislative environment. McHenry said the Senate should have acted on the bill before it became entangled in election politics.

McHenry contrasted the CLARITY Act's failure with the GENIUS Act, enacted in 2025. The law established a federal regulatory framework for payment stablecoins, including rules on issuers, reserves, redemption obligations and supervisory standards. He added that a narrower, more achievable reform effort like the stablecoin bill might have been the better approach.

Minseung Kang