- The time for signing the Clarity Act into law is running out.
- The Trump administration is urging lawmakers to get a move on.
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Hi! Eric here.
The White House is pushing hard to get the Clarity Act over the finishing line.
The landmark bill that seeks to cement the rules of the game for the crypto industry has been lost in legislative limbo for months.
US lenders, terrified of losing customers to the upstart industry, have locked horns with crypto companies and legislators over whether or not stablecoin holders should be allowed to get paid interest.
Crypto companies say yes, lenders say no, and little progress seems to have been made as a result. That’s despite repeated exaltations from the likes of senators, industry lobby groups, and crypto CEOs that a deal is edging closer, that it’s almost within touching distance. You can almost smell it.
The stakes couldn’t be higher. Not only would the Clarity Act provide the crypto industry with some much needed certainty, the passing of the bill is also seen as a key trigger for Bitcoin’s next rally.
The top cryptocurrency and altcoins are trading 40% below their October all-time highs.
But time is running out. The Senate Banking Committee is heading to a crucial review of the bill in the final weeks of April.
Senator Bernie Moreno warned in February that unless the bill is passed by May, then it risks losing momentum.
Indeed, with the Democrats looking likely to serve up a midterm beating to the Republicans in November, any legislative work risks being gridlocked until a new president can be elected in 2028.
The Trump administration, which has been a staunch supporter of the crypto industry, has taken notice. It is pushing to get the budding crypto law over the finishing line.
This week, Treasury Secretary Scott Bessent penned an opinion column in the Wall Street Journal. He argued that the Clarity Act is key to the future of the US financial industry.
“The US didn’t become the world’s financial centre by hesitating in moments of technological change,” Bessent said. “It led by setting standards that others followed.”
He called for the Senate to hold a markup and “send the Clarity Act to President Trump’s desk.”
Former White House Crypto Czar David Sacks, Commodity Futures Trading Commission Chair Mike Selig, and Securities and Exchange Commission Chair Paul Atkins echoed that sentiment.
The calls for action came as the White House’s Council of Economic Advisers published a report that rebuffed banks’ concerns about stablecoin yields. A ban would have a vanishingly small effect on lenders’ bottomlines, they said.
Did the call to action work? Punters on Polymarket remain unconvinced. They give the Clarity Act a 59% chance of being passed in 2026, down from 82% in February.
The Senate will return from their Easter break on April 13.
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Brian Armstrong, Coinbase’s CEO, backed Bessent’s call to action this week. The exchange, however, has been one of the roadblocks to getting the Clarity Act over the finishing line. In January, Armstrong pulled his support of that version of the bill, saying it gave the SEC too much power.
Other issues Armstrong cited include the bill’s “defacto ban on tokenised equities,” “DeFi prohibitions,” and proposed amendments that would further restrict companies’ ability to pay “rewards” on users’ stablecoin holdings.
