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As the month draws to a close, the highly anticipated crypto market legislation, known as the CLARITY Act, is reaching a pivotal juncture in Washington. This proposed law aims to provide a well-defined regulatory framework for digital asset markets in the United States, yet it has faced considerable challenges recently. Stakeholders, including lawmakers, regulatory bodies, banks, and representatives of the cryptocurrency industry, remain in intense discussions over key aspects of this legislation.
Despite these obstacles, newly appointed Chair of the Commodity Futures Trading Commission (CFTC), Mike Selig, has conveyed a firm belief that the legislation is on the brink of being enacted.
Optimism from the CFTC Chair on the CLARITY Act’s Progress
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In a recent interview with FOX Business, Selig expressed optimism, stating that the bill is “on the verge” of being signed into law, signaling confidence that Congress will ultimately approve it. “We must ensure that the legal framework for cryptocurrencies adapts to future changes. We cannot afford to have another leader like Gary Gensler disrupt everything. We are determined to see this through,” Selig emphasized.
His comments build on earlier remarks made in February, where he suggested that the market structure bill advancing through Congress could position the United States as a “benchmark” for crypto regulation. Selig pointed out that the lack of clear guidelines has driven businesses and innovation overseas for too long. “The objective [of this legislation] is to provide clarity. It’s been too long with these markets languishing and moving offshore,” he mentioned. He also anticipated that a finalized bill could be presented to President Donald Trump “within the coming months,” commending the president’s leadership and support for the crypto sector.
However, as the White House’s deadline approaches, a significant issue remains unresolved: the debate on whether stablecoins should be allowed to offer yield.
Ongoing Debate: Crypto and Banks at Odds Over Stablecoin Yield
According to a report by journalist Eleanor Terrett for Crypto In America, the ongoing discussions between the cryptocurrency and banking sectors have yet to reach a consensus on this critical issue, which is seen as crucial for the progression of the CLARITY Act. A recent meeting at the White House between policy staff from both sectors ended without agreement, following the distribution of a one-page document by banking representatives titled “Yield and Interest Prohibition Principles.” This document argued against stablecoins providing yield or rewards to their holders.
In response, the Digital Chamber, a trade group representing over 130 crypto firms along with several traditional banks engaged in digital asset activities, released its own proposed framework. This framework suggested allowing payment stablecoins to yield returns within decentralized finance (DeFi) ecosystems. The group’s recommendations aim to maintain stablecoins as payment instruments, support DeFi liquidity, and reinforce the dominance of the US dollar, while suggesting a thorough, data-driven approach to evaluate potential effects on bank deposits.
Banks have not yet formally reacted to the Digital Chamber’s proposal. However, a source within the Senate Banking Committee described the document to Crypto In America as “constructive,” while noting that some aspects might be overly broad to secure widespread backing from financial institutions. The future steps remain uncertain. Patrick Witt, the executive director of the White House Crypto Council, indicated to Yahoo Finance that another meeting could occur soon, though no specific date has been set.
As of Tuesday, the daily chart illustrates the total valuation of the crypto market cap at $2.29 trillion, demonstrating the significant scale and impact of this evolving market.
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