TL;DR
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The CLARITY Act is the bill for a regulatory framework for digital assets.
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It’s targeted for debate in the US Senate Banking Committee in late April.
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The act has stalled in the senate with TradFi opposing the regulation for stablecoins.
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Coinbase's chief legal officer expects progress and possibly finalizing within the next 48 hours.
In late April, the US Senate Banking Committee is expected to have their debate and vote on the CLARITY Act - the new bill that’ll regulate digital assets in the United States. This is a pivotal moment for digital assets and, alongside the GENIUS Act, it’s the most important bill regarding crypto since Donald Trump took office.
The CLARITY Act will bring, well, clarity, to the currently hard to navigate landscape of regulation regarding crypto in the US. It can also end the “regulation by enforcement” status the asset class currently has in the US, where the SEC will sue projects to see what happens.
In an interview with Fox, Coinbase chief legal officer Paul Grewal now says parties are coming very close to a deal to finalize the act. In fact, he expects major progress within the next 48 hours. The major sticking point, he says, has been rewards from stablecoins - by which regulatory body they should be regulated and how the rewards should be considered in the eyes of the law.
TradFi Banks are Pushing Back
Banks have been pushing back on the bill and the stablecoin issue as TradFi banks are afraid of capital flight to stablecoins. Since banks have strict capital requirements for lending and, if this bill passes, crypto does not, stablecoins could offer yield without the same regulatory burden. This would give digital assets an unfair advantage.
“I think it’s important to understand that the rules may be different because the game is very different. [...] and it’s critically important for this issue not be conflated with other challenges that banks may be facing that explain why we’re not seeing the community lending that we see in this country”
He goes on to say how important it is that, after the GENIUS Act was signed into law by Donald Trump in July last year, we get a structure in the broader market into which crypto can fit. The main point of the act is who regulates what and the main contenders are the SEC and CFTC.
Prediction market Polymarket currently has the act at a 72% chance of passing.
Trump has been clear about his aim to make the United States the crypto capital of the world, and this bill is a huge part of that aim. So far, the bill has been voted on and passed in the House by a strong bipartisan margin, 294-134, but has stalled in the Senate.
