TLDR
- Brian Armstrong, CEO of Coinbase, has changed his position and now supports the CLARITY Act after withdrawing backing in January
- Treasury Secretary Scott Bessent penned a Wall Street Journal opinion piece calling on lawmakers to approve the legislation immediately
- A vote is scheduled in the Senate Banking Committee before April concludes
- The central point of contention revolves around stablecoin yield offerings and whether exchanges like Coinbase can provide interest to users
- Senator Cynthia Lummis issued a warning that failure to act now means no legislation until 2030 at the earliest
The digital asset sector in the United States is mounting an aggressive campaign to secure congressional approval for the Digital Asset Market Clarity Act, with major stakeholders now rallying around the proposal following an extended period of legislative gridlock.
Brian Armstrong, chief executive of Coinbase, declared on X earlier this week that “it’s time to pass the Clarity Act.” This represents a notable reversal from his position in January, when he pulled his company’s endorsement, stating the legislation could not receive support “as written.” His opposition at that time triggered the Senate Banking Committee to postpone a critical markup session.
Armstrong characterized the updated version of the bill, following extensive negotiations among legislators, banking institutions, and cryptocurrency firms, as a “strong bill.”
Treasury Secretary Scott Bessent amplified the administration’s position through his own advocacy efforts. In an opinion piece published by The Wall Street Journal this week, he urged immediate congressional action. “Senate floor time is scarce, and now is the time to act,” Bessent emphasized.
The Senate Banking Committee, where the proposal has languished for more than twelve months, has now committed to conducting a vote prior to the conclusion of April.
The Stablecoin Rewards Dispute
The primary obstacle preventing advancement centers on the treatment of stablecoin yield programs. The GENIUS stablecoin legislation, which became law in July, prohibits stablecoin issuers from directly paying interest to token holders. However, the law does not prevent third-party platforms like Coinbase from distributing rewards.
Traditional banking institutions contend that permitting such yield programs would divert deposits from conventional financial entities, particularly smaller community banks. Cryptocurrency companies maintain that imposing restrictions on rewards would hamper technological advancement.
A White House economic analysis published this week concluded that stablecoin yield offerings are not likely to significantly damage bank lending capabilities. Banking representatives challenged this conclusion, arguing the analysis failed to quantify the specific effects on community banks or deposit fluctuations.
A banking industry source informed The Block on Friday that efforts continue to develop more precise language regarding the yield restriction to address lending-related concerns.
A separate source said the focus now is on “getting the banks in line to support the compromise,” adding: “Seems crypto is nearly there.”
What Happens Next
Coinbase’s legal chief Paul Grewal said lawmakers were “very close to a deal” last week.
Should the legislation successfully navigate the Senate Banking Committee, it must then be harmonized with the version from the Senate Agriculture Committee. A vote on the Senate floor would necessitate 60 affirmative votes, requiring Democratic cooperation in addition to unanimous Republican support.
Senator Cynthia Lummis, one of the bill’s strongest supporters, said on Friday she will not seek re-election and her term ends in January 2027. “This is our last chance to pass the Clarity Act until at least 2030,” she posted on X.
The Office of the Comptroller of the Currency recently granted approval to Coinbase’s application for a national bank trust charter, following comparable approvals for Paxos, Ripple Labs, BitGo, Circle, and Fidelity Digital Assets.
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