The Digital Assets Memo: Thoughts on CLARITY - looks tough but expect accelerated policy support (123/n)

Research evidence excerpt

The Digital Assets Memo: Thoughts on CLARITY - looks tough but expect accelerated policy support (123/n)

Gautam Chhugani +91 226 842 1416 gautam.chhugani@bernsteinsg.com 3 August 2026

‘securities' during a finite period. We would also expect continued push towards tokenisation of real-world assets, driving real-world assets

perpetual futures (Coinbase and Kalshi already live) and prediction markets (despite recent pushback by state regulators).

Further, as we head towards mid-terms, we expect the crypto PACs to again play a central role in supporting candidates that are constructive

towards the industry. From a tactical standpoint, we expect the crypto market to bottom and start showing momentum towards late Q3 and

early Q4 prior to the mid-terms. The current crypto winter would have lasted a full 12 months since it commenced in Q4’25 (12–15 months

bear markets are in line with previous crypto bear markets). And there could be improved chances of strong White House policy support as

we head towards the mid-terms - potentially on the Bitcoin Strategic Reserve, which was promised at the beginning of the term. We expect

the crypto industry lobby to remain a prominent influence during the coming election season.

Impact of Clarity failing on Circle, Coinbase and stablecoins: In the absence of the Clarity Act, the stablecoin compromise text would be void,

and it would be back to status quo. Coinbase can continue to offer yield on stablecoin idle balances. Circle cannot offer yield as a stablecoin

issuer but can continue to share distribution economics with partners. It would be unfortunate for the banking lobby which negotiated

hard to prevent stablecoin yields to compete with bank deposits. However, for the momentum to return to Circle and Coinbase stocks, we