Y Combinator: Clarity Act could push crypto into all startups

Y Combinator told Congress the Clarity Act would make crypto integration likely across its portfolio by clarifying which tokens are securities or commodities, creating a registration path with the Commodity Futures Trading Commission and protecting customer assets in bankruptcy.

In a post aimed at lawmakers, the accelerator wrote, “We think all YC companies will use crypto technology, like stablecoins, before long,” and added that the bill “defines which digital assets are securities vs. commodities, creates a registration path with the CFTC, and ensures customer assets become customer property in bankruptcy.”

The firm, which backed companies including Airbnb, DoorDash, Coinbase, Stripe, Reddit and OpenAI, framed the legislation as a way to reduce legal risk for issuers and intermediaries. It argued clearer rules would allow banks and brokers to custody and trade digital assets alongside cash and securities.

Lawmakers have debated market-structure legislation for more than a year. The Senate Banking Committee advanced a market-structure proposal recently; the next step is a vote in the full Senate.

One contested item in negotiations is how to treat stablecoin rewards, which let users earn yield on deposited stablecoins. Banks warn such rewards could pull deposits away from traditional institutions, while crypto firms argue limits would curb innovation and competition in payments and lending.

Political dynamics are affecting the bill’s prospects. Limited Democratic backing and Republican caution ahead of the midterm elections have complicated chances for bipartisan support. President Donald Trump’s public engagement with the crypto sector has prompted ethics questions for some lawmakers.

Y Combinator said the bill would not require companies to adopt crypto but would lower legal uncertainty that currently deters some firms from using crypto rails or stablecoins. Lawmakers will weigh those potential effects against concerns raised by banks, consumer advocates and members of both parties when the Senate votes.