Why is the CLARITY Act important?
The key to the CLARITY Act is to make the ‘rules’ of the cryptocurrency market clear. Until now, in the United States, both companies and investors have faced uncertainty as some digital assets can be interpreted as securities (SEC) and others as commodities (CFTC).
The reasons why this bill is important are as follows:
• Resolving regulatory uncertainty Once clear standards are established, companies can pursue blockchain businesses without worrying about lawsuits or regulatory risks.
• Institutional investor capital inflow It is difficult for large institutions such as pension funds, banks, and asset management companies to invest if regulations are unclear. Once legal standards are established, it is likely that trillions of dollars worth of institutional funds will flow into the digital asset market.
• Enhanced investor protection As issuer disclosure, exchange operation standards, and asset storage standards become clearer, the level of investor protection may also increase.
• Promote innovation An environment will be created where startups and developers can develop new blockchain services and tokens without regulatory uncertainty.
• Expansion of real asset tokenization (RWA) It is highly likely that the market for trading real assets such as stocks, bonds, and real estate on blockchain will become more active.
• A positive environment can be created in the Pi Network as well. The CLARITY Act does not authorize or guarantee specific projects.
However, as digital asset regulations in the United States become clearer, a more stable environment may be created for various blockchain projects, including Pi Network, to conduct business.
In conclusion, the biggest meaning of the CLARITY Act is that it is not a law to raise prices, but a law that provides 'trust' and 'predictable rules' in the market.
Clear rules attract capital, and capital drives innovation and adoption. The digital asset market will eventually grow based on ‘clarity’.