Solana’s growth has been stifled by shifting government regulations.
But it would likely thrive if a clearer regulatory framework is established.
On June 7, a coalition of more than 200 crypto firms sent a letter to Senate Majority Leader John Thune and Minority Leader Chuck Schumer, urging them to schedule the Digital Asset Market Clarity Act for a full Senate vote. The coalition argues that passing the Clarity Act would establish a federal framework for digital assets, clarify the regulatory roles of the SEC and CFTC, create clearer registration pathways, and extend protections to software developers.
The House of Representatives passed the Clarity Act last July. Still, it's been stuck in limbo in the Senate amid debates regarding anti-money-laundering measures, rules for decentralized finance (DeFi) platforms, rules for government officials holding cryptocurrencies, and community bank deregulatory provisions. But if it finally passes this year, Solana (CRYPTO: SOL) could skyrocket and outperform many other cryptocurrencies.
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Solana served more than 11,500 developers last year, making it the second-largest developer-oriented blockchain after Ethereum (CRYPTO: ETH). Solana's Layer-1 (L1) blockchain is also the fastest in the world.
Solana already handles nearly a third of all stablecoin transfers through partnerships with Circle, Visa, PayPal, Stripe, and other digital payment companies. It's also being increasingly used to tokenize real-world assets (RWAs).
However, the SEC has repeatedly targeted Solana with enforcement actions, labeling it an "unregistered security" rather than a digital commodity like Bitcoin. That pressure, along with the broader macro headwinds, drove away Solana's investors and caused its price to plummet more than 50% over the past 12 months.
The Clarity Act could stop that bleeding by reclassifying Solana and other mature blockchains as fully decentralized networks, to be regulated by the CFTC (which classifies Solana as a digital commodity) rather than the SEC. That reclassification will likely drive more investors back to Solana and its first batch of U.S. ETFs, which were approved in late 2025.
Solana, like Ethereum and other PoS blockchains, allows investors to stake (lock up) their tokens to earn rewards similar to interest. Those yields are high, but they're also exposed to shifting regulations and opposition from conventional banks. If the Clarity Act removes those regulatory hurdles, it could attract much more attention from yield-seeking investors.
Solana's bottleneck was never its technology. Instead, it was the shifting regulations and clashes between the SEC and CFTC that made it difficult to quantify. But if the Senate finally passes the Clarity Act with favorable terms for Solana and other similar blockchains, its price will surge.
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Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin, Ethereum, PayPal, Solana, and Visa. The Motley Fool recommends the following options: short June 2026 $50 calls on PayPal. The Motley Fool has a disclosure policy.