TLDR
- Brian Armstrong, CEO of Coinbase, shifted position to support the CLARITY Act following his January opposition
- Treasury Secretary Scott Bessent wrote an op-ed in The Wall Street Journal calling for immediate congressional action on the legislation
- Senate Banking Committee scheduled vote on the measure before April concludes
- Central dispute focuses on stablecoin yield programs and whether exchanges like Coinbase can offer interest to token holders
- Senator Cynthia Lummis cautioned that failing to pass the bill now could delay similar legislation until 2030
Major players in the US cryptocurrency sector are intensifying efforts to advance the Digital Asset Market Clarity Act through Congress, with influential voices converging on the legislation following prolonged delays.
Brian Armstrong, head of Coinbase, announced via X this week that lawmakers should move forward with the Clarity Act. His statement marks a notable reversal from his January position, when he pulled Coinbase’s endorsement, stating the company could not support the bill “as written.” Armstrong’s withdrawal prompted the Senate Banking Committee to postpone a critical markup session.
Armstrong characterized the updated version of the legislation, refined through extensive negotiations among legislators, banking institutions, and cryptocurrency firms, as a “strong bill.”
Scott Bessent, serving as Treasury Secretary, amplified the White House’s position through a Wall Street Journal opinion piece this week urging legislative action. “Senate floor time is scarce, and now is the time to act,” Bessent emphasized in his commentary.
The Senate Banking Committee, where the proposal has languished for more than twelve months, has scheduled a vote before April ends.
The Stablecoin Rewards Dispute
The primary obstacle blocking progress centers on how stablecoin reward programs are regulated. The GENIUS stablecoin legislation, enacted in July, prohibits stablecoin creators from directly paying interest to token holders. However, the law leaves room for third-party services like Coinbase to provide such rewards.
Traditional banking institutions contend that permitting these yield offerings would divert deposits from conventional financial entities, particularly affecting smaller regional banks. Cryptocurrency advocates counter that limiting reward programs would hinder technological advancement.
A White House economic analysis published this week concluded that stablecoin reward programs pose minimal threat to bank lending capacity. Banking representatives disputed these findings, arguing the research failed to examine specific effects on community banks and deposit retention.
A banking industry source informed The Block on Friday that stakeholders continue refining language around yield restrictions to address lending concerns.
A separate source indicated current efforts concentrate on “getting the banks in line to support the compromise,” noting: “Seems crypto is nearly there.”
What Happens Next
Paul Grewal, Coinbase’s legal chief, stated last week that legislators were “very close to a deal.”
After clearing the Senate Banking Committee, the legislation must be harmonized with the Senate Agriculture Committee’s corresponding version. A full Senate floor vote requires 60 affirmative votes, necessitating Democratic participation beyond Republican support.
Senator Cynthia Lummis, among the measure’s most vocal advocates, announced Friday she will not pursue re-election and her tenure concludes in January 2027. “This is our last chance to pass the Clarity Act until at least 2030,” she wrote on X.
The Office of the Comptroller of the Currency recently granted Coinbase approval for a national bank trust charter, following comparable authorizations for Paxos, Ripple Labs, BitGo, Circle, and Fidelity Digital Assets.
