Hoskinson says US crypto bill could take 15 years, hurting innovation

Cardano founder Charles Hoskinson warned on March 31 that the proposed U.S. Digital Asset Market CLARITY Act could take 15 years to fully implement, becoming a tool for political "weaponization" that ultimately harms new crypto projects while favoring established players.

"Even if it does get passed, it’s going to take many years of rulemaking,” Hoskinson told CoinDesk, warning the process could stretch to “15 years of rulemaking and slow rolling.” He also cautioned that shifting political administrations could use vague language in the act to attack the industry.

Hoskinson argued the bill is a deeply flawed, U.S.-centric piece of legislation born from a "crypto-hostile" political environment following the collapse of the FTX exchange. He said its structure would treat all new crypto projects as securities by default, creating a regulatory trap that makes it nearly impossible for them to compete with established tokens like Cardano, Ethereum, and XRP.

The criticism from a high-profile founder injects further uncertainty into the U.S. regulatory landscape, potentially discouraging investment in American-based crypto projects. This could accelerate a shift of capital and talent to jurisdictions with clearer frameworks, such as the European Union's Markets in Crypto-Assets (MiCA) regulation, creating a fractured global market.

FTX Collapse Fuels ‘Crypto-Hostile’ Washington

Hoskinson attributes the current political deadlock to the 2022 implosion of Sam Bankman-Fried’s FTX exchange, which he believes fundamentally soured Democrats on the crypto industry. “The challenge was that FTX blew up, and then the Democrats went from crypto-curious to crypto-hostile,” he said.

The public failure of such a mainstream-facing entity, which had sponsored major athletes and arenas, created significant political risk for lawmakers. “It said, hang on, if we take pictures with these guys, we may be taking pictures with people in prison next year," Hoskinson stated, adding that the event destroyed chances for bipartisan cooperation.

A ‘Regulatory Trap’ for New Projects

A core flaw in the CLARITY Act, according to Hoskinson, is its default classification of new digital assets as securities. He expressed deep concern with this approach, stating, “I’m not happy with all new projects starting as a security by default.”

He argued that the U.S. Securities and Exchange Commission (SEC) would have little incentive to ever re-classify a project as a non-security. “The SEC has no incentive to ever graduate anything from being a security to a non-security,” he said. This creates a system that entrenches incumbents while preventing new innovators from achieving the scale and liquidity needed to compete, a process he called "absurd."

US-Only Approach Ignores Global Frameworks

Hoskinson also criticized the legislation for its narrow, domestic focus, arguing that it ignores the global and decentralized nature of the crypto industry. He believes U.S. policymakers should be aligning with comprehensive frameworks established in other major economic hubs.

“You have to look at MiCA, Abu Dhabi, Japan, Singapore, and say, okay, what are they doing?” he urged. Without international coordination, the U.S. risks creating a standard that is incompatible with European and Asian markets, further isolating its own innovators and investors.

This article is for informational purposes only and does not constitute investment advice.