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The US Senate reaches a critical moment for digital assets. After several months of tensions, the banking committee is set to review the CLARITY Act this Thursday, a much-anticipated bill to regulate a large portion of the crypto market in the United States. However, three issues remain sensitive: yields on stablecoins, ethics rules for elected officials, and the protection of DeFi developers.
In Brief
- The vote on the CLARITY Act in the Senate banking committee is scheduled for May 14, after several months of negotiations on regulating the US crypto market.
- The yield on stablecoins remains the main sticking point between traditional banks and crypto sector companies.
- Ethics rules concerning elected officials divide senators, particularly on the timing of their inclusion in the bill.
- The DeFi section is progressing with a compromise around the BRCA, intended to protect developers while addressing national security concerns.
CLARITY Act: Stablecoin Yield Divides Banks and Platforms
As the CLARITY Act vote set for this Thursday approaches, stablecoin yield emerges as one of the most sensitive points in the negotiations. The primary showdown pits traditional banks against digital asset companies. Banking institutions want to limit platforms’ ability to offer rewards on dollar-backed stablecoins. These yields can divert customers from traditional savings accounts.
On the other side, industry players believe these programs already have a legal basis under the GENIUS law. They therefore wish to maintain their public access. In January, Coinbase distanced itself from the bill, fearing a crackdown wanted by banks.
However, a compromise presented by Thom Tillis and Angela Alsobrooks seeks to ease the pressure. It limits rewards in certain cases while maintaining them in others. The crypto sector supports this approach, while banks still see loopholes. Thus, the CLARITY Act arrives at the vote with a fragile balance on stablecoins.
Ethics Rules Shake Up Crypto Debate in the Senate
The second front concerns elected officials and their own digital projects. Several Democratic senators want to limit the ability of public officials to launch or promote cryptocurrency-related products during their terms. The White House has long opposed a ban targeting initiatives associated with President Donald Trump.
The disagreement also concerns timing. Tim Scott, chairman of the banking committee, says these ethics rules do not fall under his committee. According to him, the issue must wait for the final vote in plenary session. But pro-crypto Democrats, including Ruben Gallego, dispute this interpretation and threaten to vote against the CLARITY Act if these safeguards remain absent.
This tension weighs on the search for bipartisan support. Even if the bill can pass committee along party lines, its sponsors know it will need seven Democratic votes in plenary. Thus, a broad agreement would make it easier to move forward. For several actors, a later debate on ethics remains possible and would not necessarily block the CLARITY Act. The sequence remains central for the future of the regulated crypto market.
DeFi and BRCA: An Agreement Seeks to Reassure on Security
The third issue concerns decentralized finance and software developers. The Blockchain Regulatory Certainty Act, or BRCA, was annexed to the CLARITY Act last fall. It aims to protect certain privacy tool developers from lawsuits as facilitators of illegal funds transfers.
This protection worries senators sensitive to national security issues. Chuck Grassley, Republican, and Catherine Cortez Masto, Democrat, have expressed reservations. Their concern centers on the risk of creating an overly broad zone for activities difficult to control.
On Monday, Cynthia Lummis announced an agreement with Grassley on this section. A phrase would be added to the BRCA part to specify the required level of intent to qualify an operator as an illegal funds transfer. This revision seeks to clarify the framework without removing the desired protection for crypto developers. The CLARITY Act thus retains its ambition to provide benchmarks for decentralized activities.
The May 14 vote should measure the bill’s political strength. If disagreements remain open, negotiators have room before Congress’s summer recess. The CLARITY Act could therefore pass narrowly, then move the most sensitive debates to plenary, representing a direct stake for the US crypto sector.
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Journaliste et rédacteur web passionné par l’univers des cryptomonnaies et des technologies Web3. J’y traite les dernières tendances et actualités afin de proposer un contenu de haute qualité à un large public du secteur.
DISCLAIMER
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
