BN
TechAI Desk•2 views

Crypto Lawmakers Push CLARITY Act After Stablecoin Deal

Crypto industry leaders are lobbying Congress to pass the CLARITY Act, a bill designed to regulate stablecoins. The proposed legislation would ban yield rewards for merely holding stablecoins but permit rewards upon their actual spending. Progress is reported in the Senate Banking Committee, where Chair Tim Scott indicated a bipartisan markup vote is anticipated in May. However, the bill faces scrutiny from the banking industry, which remains cautious about potential loopholes. Furthermore, internal disagreements among Republican senators and lingering concerns over ethics provisions could complicate the final passage of the act.

Ad slot
Crypto Lawmakers Push CLARITY Act After Stablecoin Deal

Major cryptocurrency firms are urging Congress to advance the CLARITY Act, a key market structure bill, following a breakthrough agreement reached between banks and the crypto sector regarding stablecoin rewards.

The CLARITY Act Proposal

The proposed legislation, introduced by Senators Thom Tillis (R-NC) and Angela Alsobrooks (D-MD), aims to regulate stablecoins within the crypto market. The core provisions address how yield-like rewards can be offered:

  • Prohibition: The bill would ban crypto companies from offering yield-like rewards simply for holding stablecoins.
  • Allowance: It would permit such rewards if users actively spend or use the stablecoins.

This 'rules-of-the-road' bill is a top priority for the crypto industry and is reportedly being actively pushed by the Trump White House.

Progress in the Senate Banking Committee

Ad slot

The debate over stablecoins was previously cited as the main obstacle to passing the bill through the Senate Banking Committee. However, progress is being reported:

  • Committee Status: Banking Committee Chair Tim Scott (R-SC) stated that the committee is "nearing consensus" and is working toward a bipartisan markup vote scheduled for May.
  • Industry Reaction: The crypto industry has largely welcomed the text. Coinbase CEO Brian Armstrong urged the committee to "mark it up," meaning to hold a vote.
  • Advocacy: The Blockchain Association CEO stated the legislation is "a step in the right direction" and urged the committee to proceed without delay.

Remaining Hurdles and Concerns

Despite the positive momentum, several uncertainties remain that could jeopardize the bill's passage:

  • Republican Support: It is unclear if all 13 Republican members are prepared to vote in favor, which was a factor in the cancellation of a planned January vote.
  • Banking Industry Stance: The banking sector has not publicly weighed in on the new text. Anonymous industry sources noted concerns about potential loopholes, such as provisions allowing interest-like payments.
  • Bipartisan Friction: While some Democrats and Republicans are working toward passage, disagreements persist, particularly concerning ethics provisions.
  • Senator Alsobrooks' Caveat: Senator Alsobrooks expressed satisfaction with the stablecoin reward agreement but noted that other areas require "more compromise and improvement" before she can fully support the bill.

Outlook

While Senator Tillis, an ally of the banking industry, has expressed satisfaction and encouraged Chair Scott to schedule the vote, the final vote is contingent upon overcoming potential opposition from the banking sector or internal party disagreements.

Ad slot