Haseeb Qureshi: Why The Market Doesn't Care About CLARITY (Here's Why)

Haseeb Qureshi argues that the CLARITY Act has almost no relevance to Bitcoin's value, limited relevance to stablecoin asset prices, and changes little for ETH since it is already classified as a commodity. Polymarket odds on CLARITY passage moved from roughly 80 percent in February to 50-50 a few weeks before recording to 15 percent at recording, yet crypto market prices showed no visible reaction to any of those shifts. Regressing those odds against Bitcoin, ETH, or altcoin prices produces no predictive signal, which Qureshi says refutes the narrative that markets dislike uncertainty and will rally once CLARITY passes or fails. Kalshi markets price more than 30 percent probability that CLARITY passes within the next year and more than 50 percent probability it passes by 2028. Qureshi predicts that if Democrats win the House, the bill will be marked up again and the final version will be less favorable to the industry. SEC and CFTC rulemaking is expected to proceed regardless of whether CLARITY passes.

The Genius Act's key signal is regulatory permission to create stablecoins within the American economy. Companies including Klarna and Stripe are launching stablecoins without waiting for final rules because the market is too large to risk being late. Implementation has been delayed because rulemaking was delegated to agencies including the Fed, SEC, and OCC, which are moving slowly and missing deadlines. Qureshi argues that market participants knowing generally where regulation is heading is sufficient to galvanize the market even without finalized rules.

Qureshi contrasts stablecoins directly with tokenized deposits, which he calls the wrong architectural answer. Tokenized deposits require every holder to be a customer of the issuing bank, making them a blockchain-based intra-bank ledger that adds no new interoperability or functionality beyond what a customer could already do on a bank website. Banks settle with each other at end of day by netting transactions as a deliberate capital efficiency choice, not a technological limitation, so even interbank tokenized deposit adoption would likely yield no efficiency improvement. Stablecoins are outcompeting Western Union in multiple payment corridors by undercutting the margins of the traditional correspondent banking system. Western Union partnered with RAIN, a Dragonfly portfolio company, to launch a stablecoin-backed stable card, which Qureshi frames as an attempt to avoid losing all market share rather than a path to superior economics.

RAIN holds what Qureshi estimates is probably more than 50 percent market share in the stablecoin card issuance space. RAIN shares a large portion of interchange economics back to card issuers and neobanks, and Qureshi identifies this economic sharing model as the primary reason for its fast growth. Card issuance, not stablecoins at merchant point of sale, is the segment growing rapidly. Stablecoin acceptance at merchant point of sale only openly occurs in high-inflation or near-failed-state countries, and the card model solves the two-sided market problem because every merchant already accepts the card network. Qureshi identifies RAIN as the first company he has seen that could plausibly realize the vision of something like Apple Pay or Google Pay running on stablecoin rails, and predicts it could become an enormously large company on that positioning.

Qureshi describes OpenUSD, built by Tempo and Stripe, as open and permissionless with open source code, but says it currently gives Libra vibes in terms of market credibility. Some Korean companies listed as consortium partners publicly stated they had not agreed to participate and asked to be removed, and joining the consortium functions as a free option requiring no capital commitment. Bridge, which is effectively quarterbacking OpenUSD, already had a stablecoin before OpenUSD that did not get significant adoption, and OpenUSD is not yet live. By contrast, Qureshi considers Robinhood's approach of building its chain as an Ethereum L2 with interoperability and composability to be the right model, and predicts companies will increasingly take their cues from Robinhood and Tempo on how to build properly open and permissionless blockchain infrastructure.

Qureshi says enterprise and consortium blockchains such as Corda and R3 have historically never built anything of value, and that value from enterprise chains comes from connectivity and interoperability with public chains rather than from replacing old databases with blockchains. On custody, ordinary people should almost certainly use third-party custody rather than self-custody, and Bitcoin ETF custody is effectively held with Coinbase because Coinbase Custody services the ETFs. Cold Guard, which holds approximately one to two percent market share in the Bitcoin hardware wallet space, had very bad security practices and a vulnerability was found for a couple dollars of AI spend, though Qureshi cautions this does not mean Ledger, Trezor, and other major hardware wallets are compromised. Only the largest hardware wallet vendors can afford robust AI-driven cybersecurity scanning.

The long-term endgame Qureshi describes is the disintermediation of networks like Visa, where large merchants and card issuers settle directly with each other in stablecoins without a payment network extracting rent. He gave Amazon as a concrete example, describing a future where Amazon detects a RAIN card at checkout and routes settlement directly in stablecoins, bypassing Visa entirely, while noting this outcome is very far away. The most effective near-term path to adoption is keeping the user experience familiar, with card-based interfaces at the front end while stablecoins operate invisibly in the background.