[Edaily Reporter Lee Jeong Hun ] “Although the Digital Asset Market Structure Act—commonly known as the Clarity Act—failed to pass the U.S. Senate this time, it was merely a bill that would have created additional opportunities or upside potential for us, and there will be no major changes to the Solana ecosystem. Rather, the fact that financial regulators have permitted tokenized stocks in the U.S. will be a major opportunity, and we want to bring the entire massive U.S. capital market onto the blockchain.”

Miller Whitehouse-Levine, founder and CEO of the Solana Policy Institute (SPI)—a policy-focused organization that researches blockchain and digital asset policies in the U.S. while participating in discussions on related legislation and regulatory oversight—expressed these aspirations during an exclusive interview with Edaily on the 30th in Yeouido, Seoul.

She stated, “From our perspective, the Clarity Act [which was recently rejected by the U.S. Senate] was less a core piece of legislation that the ecosystem absolutely needed and more a bill that would have created additional opportunities and room for growth.” She added, “The entities that truly needed this law were U.S. centralized exchanges, and while its passage would have had a significant positive impact on the on-chain world, even if it hadn’t passed, it wouldn’t have brought about major changes to the Solana ecosystem.”

He continued, “In fact, we had a relatively realistic view of the likelihood of the Clarity Act passing this time,” and added, “That’s why, over the past year, rather than focusing solely on congressional bills, we devoted a great deal of time to the rulemaking processes of the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).”

Whitehouse-Levin, the CEO, expressed optimism, stating, “Since the bill actually fell through, the SEC and CFTC have begun to unveil the policies they had been preparing, and I believe there are still positive aspects to this.” He added, “In particular, the SEC is making the U.S. on-chain market more favorable by utilizing its existing authority to create mechanisms like the ‘innovation exemption’ (which allows for a five-year temporary exemption for tokenized stocks) and by amending regulations.”

He also noted, “Trading of tokenized U.S. stocks was mostly taking place overseas, and Americans were effectively unable to participate. While many interesting developments were occurring on-chain outside the U.S., such activities were often not permitted within the country.” “With the SEC’s actions paving the way for secondary trading of tokenized assets not only on the New York Stock Exchange or NASDAQ but also on public blockchains, I want to bring all—or even just a portion—of the U.S. securities market, which is worth approximately $100 trillion (13,600 trillion won), onto the blockchain,” he said.

The following is the full transcript of a Q&A interview with Whitehouse-Levin, Founder and CEO of the Solana Policy Institute, and Patrick Wilson, Secretary-General of the Solana Policy Institute, who was also present.

-If you had to define Solana’s core identity in one sentence, what would it be?

△That’s a difficult question. If I had to put it in one sentence, I’d describe it as a global public infrastructure that is accessible to everyone and supports all economic activity. That vision carries a lot of meaning. Personally, I see it as similar to how the internet democratized access to information. With just an internet connection, you can access nearly all the knowledge that exists in the world today. With just a smartphone, you can find any information and communicate with anyone around the globe. In the past, information transmission systems were slow, complex, and poorly interconnected. Fifty years ago, to send a letter to Korea, you had to use the U.S. Postal Service (USPS), and there was no way of knowing how long it would take or whether it would arrive safely. Today, however, we can send messages instantly. Yet, many aspects of our financial system still operate much like that postal system from 50 years ago. We must rebuild our financial infrastructure by leveraging the power of the internet. Just as information now moves instantly over the internet, we must make finance work that way as well. That is precisely what we mean by the Internet Capital Markets (ICM). Our goal is to revolutionize the way finance and value move, just as the internet revolutionized communication.

-The Clarity Act has stalled in the U.S. Senate. If major U.S. virtual asset legislation is delayed until 2027 or later, what does that mean for Solana and its ecosystem?

△From our perspective, this bill was less a piece of legislation that the ecosystem absolutely needed and more one that would create additional opportunities and upside potential. It would have had a significant positive impact on the on-chain world. In fact, the entities that truly needed this law were the centralized exchanges in the U.S. They must deal with financial regulators in over 50 states individually in order to operate across the entire country. We took a relatively realistic view within the industry regarding the likelihood of the Clarity Act passing. That’s why, over the past year, we devoted a great deal of time not only to the congressional bill but also to the rulemaking efforts of the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). In fact, after the bill fell through, the SEC and CFTC began to unveil the policies they had been preparing. So I believe there are still positive aspects to consider. What the SEC and CFTC are currently doing is largely consistent with what the Clarity Act would have required them to do had it passed. The bill wasn’t structured to dictate specific methods to the agencies step by step. So, to be honest, I don’t think the failure of the Clarity Act will bring about massive changes to the Solana ecosystem. It might sound a bit strange, but that’s close to the truth. The SEC and CFTC already possessed significant authority even if the bill hadn’t passed. Now, they are leveraging that existing authority to create mechanisms like the “innovation exemption” and amend regulations, thereby making the U.S. on-chain market more favorable.

-What do you think was the decisive reason for the Clarity Act’s failure? Is it possible to renegotiate it in the future?

△It’s impossible to say it failed because of just one reason. I believe there is some truth to most of the explanations people have offered so far. Each one played a part in the bill’s failure. Back in 2018, when we first began working on the Clarity Act, the bill was only about 50 pages long. Most of it dealt with regulating centralized exchanges. But now, it has become a massive bill totaling 650 pages. It touches on the Securities Act, the Commodity Exchange Act (CEA), banking laws, and the Bank Secrecy Act (BSA). It has become too large and complex, and as a result, the number of stakeholders has increased significantly. Jamie Dimon of JPMorgan expressed strong concerns, and the interests of various companies, including the Chicago Mercantile Exchange (CME), were also affected. Therefore, I believe that the bill’s scope becoming too broad is one of the key reasons for its failure. There are simply too many stakeholders who need to be considered regarding the bill. Furthermore, I believe the President’s involvement in the virtual asset sector did not help the industry’s cause. That was another factor that made the bill even more complicated. Ultimately, there are hundreds, if not thousands, of reasons why the bill failed, and all of them played a role to some extent. It’s difficult to pinpoint a single decisive reason.

-In that case, as a sort of “Plan B,” do you believe that the rulemaking by the SEC and CFTC alone will have a sufficient positive impact on the Solana ecosystem and the virtual asset industry?

△In fact, the agencies are moving quickly. Two days after the bill effectively fell through, the SEC announced its innovation exemption. The CFTC also sent a large-scale rulemaking proposal to the White House for approval. I expect it to be released soon. Following the bill’s failure, it seems the regulatory agencies are moving swiftly in a sort of “shock and awe” manner. In fact, much of this work had already been underway over the past 18 months. However, out of respect for Congress’s legislative deliberations, the agencies had been waiting rather than making announcements or moving forward. That was a reasonable choice; after all, Congress is the ultimate authority, and regulatory agencies are accountable to it. For example, the SEC’s innovation exemption was nearly complete around January of this year. So, once it was determined that the bill had no realistic chance of passing, they were able to release it immediately. I wouldn’t necessarily call this “Plan B.” This is because, regardless of whether the Clarity Act passed or failed, the SEC and CFTC would have had to take these measures eventually. We were always looking at two separate paths simultaneously: the legislative track and the regulatory track. It was less a matter of “Plan A” and “Plan B” and more like two tracks running in parallel. However, with the failure of the Clarity Act, time pressure increased, and as a result, the regulatory agencies had to move very quickly. The innovation exemption is a good example. The bill contained a provision requiring the SEC to create an innovation exemption through rulemaking. Had the bill passed, the SEC would have received an explicit mandate from Congress to do so, but the SEC can proceed as it is now using only its existing authority. I also believe the measures currently underway could serve as excellent test cases for future legislation. It seems unlikely that new legislation will emerge within the next few years. The Clarity Act is likely to be a long-term project spanning decades. However, by actually implementing regulatory policies over the next few years, we’ll learn what works and what doesn’t. For example, if the innovation exemption doesn’t function properly, it might actually be a good thing that it wasn’t permanently enshrined in law. Once something is codified into law, it becomes difficult to amend. The experience gained over the next few years will serve as crucial data for future legislation.

-Why is the SEC’s innovation exemption particularly important for Solana? Also, is there a possibility that policy will change after the November midterm elections?

△First, regarding why it’s important: While many exciting developments were taking place on-chain outside the U.S., they were often not permitted within the country. For example, trading in tokenized U.S. stocks was mostly conducted overseas, and Americans were effectively unable to participate. This was because these transactions did not take place through traditional financial institutions or exchanges registered with the SEC, such as the New York Stock Exchange or U.S. broker-dealers. Traditionally, the secondary market for U.S. securities could only operate legally within these traditional financial markets. However, just two weeks ago, the SEC brought about a major change. It paved the way for secondary trading of these assets not only on the New York Stock Exchange or NASDAQ but also on public blockchains. I believe this is a huge step forward in realizing the vision of an internet capital market. The U.S. securities market is worth approximately $100 trillion. I want to bring at least a portion of that market onto the blockchain. It’s an interesting statement considering how much we’ve disliked “securities” over the years, but $100 trillion is a massive market. We want to bring every part of the financial system onto the blockchain. Regarding your second question about the midterm elections, this November’s midterms will not directly influence regulatory agency policies. That’s because regulatory agency policies ultimately fall under the president’s influence. In particular, under the current structure, the President decides who will lead the SEC and the CFTC. That won’t change as a result of this November’s election. However, the situation could change after 2029. This is the biggest drawback of the Clarity Act not having been passed. If we rely on rules or guidance rather than legislation, policies can easily change when there’s a change in administration.

-So there shouldn’t be any problems for the next few years.

△It should be fine for the time being. Looking at it more optimistically, it’s important that actual adoption and usage increase sufficiently during that period. The SEC’s innovation exemptions included provisions regarding trading volume limits; if the market grows to meet those limits and the limits are subsequently raised, these exemptions and guidance will gradually become policies that are difficult to reverse.If traditional financial institutions actually use these mechanisms and their effectiveness is proven in the market, it will become much harder for the next administration to come in and say, “We’re going to scrap this guidance” or “We’re going to eliminate this exemption.” That’s why actual usage and adoption over the next few years are crucial. For example, trading highly liquid assets on Solana using CLOB-based market-making structures could be less expensive for investors than trading on the Nasdaq or the New York Stock Exchange. If market structures based on the innovation exemption actually function well and deliver better outcomes for U.S. investors, the next administration will have less justification for eliminating them. First, no problems have arisen, and second, investors are benefiting from trading at lower costs. This inevitably raises the question: Why should this exemption be eliminated? Furthermore, if the next administration abolishes a system established through formal rulemaking without sufficient justification, it could face litigation.

-What is the most important principle SPI considers when deciding on election-related expenditures or political donations?

△Ultimately, it is about supporting politicians who share our vision. There are lawmakers who are very supportive of crypto and endorse Solana’s vision—as discussed earlier—namely, the direction of a global public financial infrastructure and internet capital markets. We support politicians who endorse that vision. This support can take various forms. Looking at the situation over the past few months, it appears that a majority of Democratic senators do not align with our position. However, there are still lawmakers within the Democratic Party who strongly support the crypto industry. When the Clarity Act passed in the House of Representatives, it received overwhelming bipartisan support. The Senate, however, proved much more challenging. Ultimately, what matters is maintaining relationships with both sides. Since the administration could change, and the majority party in either the House or Senate could shift, we need to continuously build and maintain relationships with both parties. We do not want to see a repeat of the “war on crypto” that occurred during Gary Gensler’s (former SEC Chair) tenure. We need a sustainable, bipartisan consensus on how to regulate the crypto industry, regardless of the approach. Ideally, a consistent framework will be established that allows businesses to operate safely and in compliance with regulations, so that policymakers no longer have to deal with these issues time and time again. If such a system is created, it could last for 100 years, and then we’ll be able to focus on other things.

-There’s talk that after the November midterm elections, Democratic Senator Elizabeth Warren—who is the most critical of virtual assets—might become chair of the Senate Banking Committee.

△It’s a possibility. There are other candidates as well, and from our perspective, it’s hard to say she’s necessarily the better choice. However, 60 votes are required to pass a bill in the U.S. Senate. Just as the Clarity Act failed to pass because it couldn’t secure 60 votes, it won’t be easy for a bill that’s highly detrimental to the cryptocurrency industry to secure 60 votes either. There are certainly plenty of senators who hold opposing views to Senator Warren. There are crypto-supportive senators like Senator Bernie Moreno, and even within the Democratic Party, there are senators who take a more moderate stance on this issue. Furthermore, for a bill to actually become law, all three branches—the Senate, the House of Representatives, and the President—must agree. I don’t think there’s a high likelihood that President Trump will sign a bill that is excessively harmful to the crypto industry over the next two years. However, if Senator Warren or someone else becomes chair of the Senate Banking Committee, they could wield significant influence even without passing legislation. They could hold numerous hearings at the committee level and summon industry figures to conduct an in-depth investigation into the cryptocurrency industry. The committee has the authority to hold hearings, conduct investigations, and issue subpoenas. Therefore, even without passing legislation, the committee’s authority alone could place a significant burden on the industry.

- There are lessons that South Korean lawmakers can learn from the U.S. legislative process, including the GENIUS Act. Do you have any plans to engage directly with South Korean policymakers?

△ I believe our role is fundamentally to share the experiences we’ve had in the U.S. As a U.S.-based organization and as Americans, we do not believe it is appropriate to directly offer opinions on the direction South Korean legislation should take. This is because each country must enact laws that take into account its own characteristics and economic circumstances. Therefore, we do not intend to support specific outcomes in South Korea or actively advocate for any particular policy direction. Our role is to explain what went wrong in the U.S., what we’ve experienced, and to answer questions.

-In Korea, there is a debate over whether stablecoins should primarily be issued by banks, or whether fintech and big tech companies should also be allowed to issue them. What insights can the U.S. experience offer Korea?

△I’m not sure if we can necessarily call it a “lesson,” but I can explain how the U.S. Genius Act addressed this issue. In the U.S., I believe the model of private companies issuing dollar-pegged stablecoins has been quite successful over the past decade. There’s an expression in the U.S.: “Don’t fix what isn’t broken.” The Genius Act can also be seen as embracing a model that has already been operating successfully through private-sector experimentation over the past decade. In other words, the approach is: “Since this is already working so well, let’s enshrine it in law.” However, the bill restricts large publicly traded companies above a certain size from issuing stablecoins. To be precise, it includes a provision prohibiting publicly traded companies with a market capitalization or size exceeding $10 billion from directly issuing dollar-pegged stablecoins. This amendment was crafted to address concerns in the U.S. that Big Tech or other large corporations might issue dollar-pegged stablecoins. The Genius Act addressed this issue in this manner.