clarity

JPMorgan analysts have stated that negotiations for the U.S. "Cryptocurrency Market Structure Act" (i.e., the CLARITY Act) have entered the final stages, with both sides reaching compromises on a few remaining contentious points. The number of disputes has been reduced from over a dozen to 2-3 core issues, with discussions on stablecoin rewards being "in a good place." While banks express concerns about stablecoins offering similar yields to deposits, there is an overall bipartisan compromise trend. JPMorgan believes that "there is no perfect bill," and once passed, the bill will provide important regulatory clarity for the integration of digital assets into the U.S. financial system.The "Cryptocurrency Market Structure Act" is currently in advanced negotiations in the U.S. Senate, with Senate staff stating that the draft is "very close" to resolution, but the final text has not yet been released, nor has a formal vote been scheduled. The remaining major disagreements focus on stablecoin rewards, DeFi regulation, and token classification issues. Although optimism is rising, there is still a risk of delays due to the 2026 midterm elections, which could lead to a more uncertain political environment. If the bill is ultimately passed, it will delineate the regulatory authority between the SEC and CFTC, providing a long-term regulatory framework for stablecoins, DeFi, and the entire cryptocurrency industry.

According to a report by CryptoSlate, the White House Economic Advisory Council recently released a research report indicating that banning the yield on stablecoins has very limited protective effects on bank loans, yet it significantly reduces consumers' ability to earn returns through digital cash. This conclusion directly challenges the core argument of the banking industry supporting the yield ban and provides new policy backing for the advancement of the CLARITY Act.Currently, Treasury Secretary Bessent and SEC Chair Atkins have both publicly expressed support for the bill, indicating a convergence of positions between the executive branch and regulatory agencies. However, the Senate Banking Committee has yet to announce a timeline for the bill's review, and political maneuvering remains the biggest variable.Analysts point out that if the committee can complete its review before the summer recess, the probability of the bill passing will significantly increase; otherwise, it will face the dual risks of election pressure and legislative delays.

According to the Senate Banking Committee's official website, next week (April 21) there is only one nomination hearing on the agenda, and there are no scheduled discussions/modifications for the anticipated digital assets or CLARITY Act.Additionally, Politico reports that Senator Thom Tillis will release the final draft this week, which is the last piece needed before the committee holds a markup meeting. The bill still needs to align with the Senate Agriculture Committee, pass the Senate's 60-vote threshold in a full vote (requiring Democratic support), and then coordinate with the House of Representatives.Some analysts point out that if a markup meeting is not scheduled between April 20 and 25, the midterm election politics could completely stifle the bill, as bipartisan cooperation would vanish entirely.

Patrick Witte, the Executive Director of the White House Digital Assets Presidential Advisory Committee, stated on Monday that substantive progress is being made in Senate negotiations surrounding the Clarity Act, with a compromise reached on the issue of stablecoin yields expected to hold, and the focus of negotiations has shifted to other unresolved topics.The issue of stablecoin yields was previously the biggest obstacle to advancing the bill. Banking lobbyists successfully persuaded some senators that providing yields similar to bank interest to stablecoin holders would threaten the traditional banking deposit base, causing the bill to reach an impasse. Witte stated, "We hope that the compromise reached will be durable and stable. Resolving this issue is a prerequisite for advancing other pending matters." Last week, the White House economic advisors released a report downplaying the risk concerns raised by the banking industry; in response, the American Bankers Association rebutted on Monday, claiming the White House's arguments were flawed.In addition to stablecoin yields, the bill also faces several disagreements, including illegal financial protection mechanisms in the DeFi space and a demand from Democrats to prohibit senior government officials (specifically targeting President Trump) from profiting from the crypto industry. Witte did not disclose which topics have reached consensus but indicated that negotiations have "made considerable progress behind the scenes," stating, "We are very close to comprehensively resolving these issues." The Clarity Act still needs to go through the Senate Banking Committee's markup review process before being submitted for a full Senate vote. Witte expressed optimism about reaching a final agreement, noting that many issues that previously seemed stuck have gradually been resolved.

U.S. Senator Lummis stated on social media that the previous administration led to an outflow of the digital asset industry. She emphasized that now is the time to establish clear regulatory rules for the digital asset industry and welcome its return to the U.S., calling for the passage of the Clarity Act.

U.S. Senator Cynthia Lummis stated that the United States should not continue to delay the legislative process of the CLARITY Act, or it may take nearly four years to push for improvements in the regulatory framework for the cryptocurrency industry again.She posted on social media platform X, saying, "This is our last chance to pass the CLARITY Act before at least 2030," and emphasized that "we cannot let the future of American finance be put at risk." The bill aims to provide a clearer regulatory structure for the cryptocurrency industry, clarifying the responsibilities of regulatory agencies to promote industry innovation and market development. With the U.S. midterm elections approaching, there are concerns that congressional priorities may shift, slowing down the legislative process.Former White House AI and cryptocurrency affairs head David Sacks also expressed support for advancing the bill as soon as possible, stating, "Now is the time for action," and anticipated that the relevant market structure legislation would ultimately be signed into law by the president. In the industry, several individuals, including Coinbase CEO Brian Armstrong, have recently called for an expedited legislative process, believing that clear rules will promote innovation and increase market participation. On the regulatory side, SEC Chairman Paul Atkins also expressed support for advancing comprehensive market structure legislation to avoid ongoing regulatory uncertainty affecting industry development.

According to CoinDesk, Ron Hammond, the policy head of crypto market maker Wintermute, stated that the legislative process for the U.S. crypto market structure bill, the Clarity Act, is still hindered by multiple factors, with a probability of passing this year at about 30%.The bill aims to clarify the division of responsibilities between the SEC and CFTC in the regulation of digital assets, but the current negotiation progress is uneven, with the timeline repeatedly delayed. The main resistance comes from traditional banking institutions, particularly around the significant disagreements regarding whether stablecoins should offer yields. Compromise proposals have been blocked multiple times, and additionally, the internal divisions within the Democratic Party, as well as issues related to DeFi compliance and anti-money laundering, add uncertainty to the legislation.However, Ron Hammond believes there is still room for the bill to advance, but whether it can be enacted within the year depends on whether key disagreements can be resolved.

The chairman of the U.S. Commodity Futures Trading Commission (CFTC), Mike Selig, announced the first members of the newly established Innovation Working Group, aimed at providing clear industry rules for American innovators. The working group is led by Mike Selig's senior advisor, Michael Passalacqua, and the first five members include former Latham & Watkins crypto lawyer Hank Balaban, former Patomak crypto and prediction markets advisor Sam Canavos, CFTC legal senior official Mark Fajfar, former Sidley blockchain lawyer Eugene Gonzalez IV, and CFTC Market Participants Division special advisor Dina Moussa.In addition, Mike Selig also released an Innovation Tracker, highlighting the agency's work in advancing regulatory clarity, market integrity, and technological progress, with a primary focus on areas including cryptocurrency and blockchain, AI and autonomous systems, contracts and prediction markets.

Coinbase CEO Brian Armstrong posted on the X platform in response to U.S. Treasury Secretary Scott Bessent's call for the Digital Asset Market Clarity Act (CLARITY Act), expressing agreement and gratitude for his advocacy. Brian Armstrong emphasized that the bipartisan cooperation of senators and staff over the past few months has made the bill more refined.

Paul Atkins, the chairman of the U.S. Securities and Exchange Commission (SEC), stated on social media, "The design goal of Project Crypto is that once Congress takes action, the SEC and CTFC will be ready to implement the CLARITY Act. Treasury Secretary Basant is right: it's time for Congress to plan for future regulatory safeguards and advance comprehensive market structure legislation to President Trump's desk."

U.S. Treasury Secretary Scott Bessenet wrote that the United States has long dominated global financial market regulatory standards, but this leadership is not a given. He urged Congress to pass the Clarity Act as soon as possible to establish a clear regulatory framework for digital assets.Bessenet cited data indicating that the global market value of digital assets has fluctuated between $2 trillion and $3 trillion over the past year, with about one-sixth of Americans holding some form of digital asset. The application of blockchain technology in payments, settlements, and physical asset exchanges continues to expand. He emphasized that cryptocurrency is no longer a niche experiment but a technology widely adopted globally, and the U.S. must take proactive measures to continue leading in the formulation of rules in this field.

According to Crypto In America, the core disagreement between the U.S. cryptocurrency and banking industries regarding the stablecoin yield mechanism may be close to resolution. Several informed sources have revealed that both sides have initiated a new round of communication regarding the latest compromise plan. Although the details have not been disclosed, the overall expectation is becoming optimistic.A previous draft pushed by U.S. senators had sparked dissatisfaction in the industry, with institutions such as Coinbase and Stripe expressing concerns. The market is focused on the "Clarity Act," which is expected to enter the committee review stage later this month. If the yield issue is alleviated, the legislative focus will shift to remaining topics such as DeFi, tokenization, and token classification.In addition, a White House research report on stablecoin yields and their impact on the banking system has yet to be released. It is said that the overall conclusion of the study leans towards supporting the cryptocurrency industry, and the reason for the delay in publication remains unclear.

Coinbase Chief Legal Officer Paul Grewal stated in an interview with Fox Business that the upcoming "Clarity Act" is "very close" to reaching an agreement regarding the debate on stablecoin yields.Grewal mentioned that the cryptocurrency market structure bill is progressing, although the debate surrounding stablecoin yields continues. He noted that all parties are gradually realizing that while reward mechanisms are important, other key elements in the bill are also crucial for achieving President Trump's vision of making the U.S. the "global crypto capital."The U.S. banking industry has previously lobbied for the "Clarity Act" to include provisions that prohibit crypto platforms from offering yields on idle stablecoin balances, arguing that this could lead to a significant outflow of bank deposits. In response, Grewal stated that there is currently no evidence indicating that deposit outflows are actually occurring and pointed out that the issue of stablecoin yields should not be conflated with other challenges facing the banking industry.Grewal expressed optimism about the bill's prospects, stating that he expects the Senate Banking Committee to initiate review hearings in the coming weeks and ultimately hold a full vote.Coinbase and its CEO Brian Armstrong have previously publicly opposed versions of the bill that prohibit rewards on idle stablecoin balances, arguing that such restrictions would stifle innovation in the U.S. and harm consumer interests. Meanwhile, Coinbase's stock price (COIN) has fallen 50% over the past six months amid a prolonged downturn in the crypto market, closing down 0.9% at $172.99 on Wednesday.

Charles Hoskinson, the founder of Cardano, has raised strong doubts about the U.S. Digital Asset Market CLARITY Act, believing that the bill could bring long-term negative impacts in terms of implementation, political risk, and industry structure.Hoskinson stated that even if the bill passes, it may require up to 15 years for rule-making and implementation, leading to a long-term stagnation of the industry amid uncertainty. He pointed out that the current political environment in the U.S. (especially after the FTX incident) has tightened regulations, and new projects may be defaulted to be considered securities, thereby stifling innovation. He further warned that the bill could be "weaponized" by future administrations, becoming a political tool, with different parties potentially using its provisions to target specific projects or industry participants.In addition, Hoskinson criticized the bill for its complex design and being overly "U.S.-centric," neglecting global regulatory coordination while focusing too much on marginal issues like stablecoin yields, failing to address the core problems of the industry. He believes that this structural design may actually benefit mature projects (such as Cardano, XRP, Ethereum) but create higher barriers for newcomers, further exacerbating the trend of industry centralization.

Peter Van Valkenburgh, Executive Director of Coin Center, stated that if the cryptocurrency market structure bill CLARITY fails to pass, a future unfriendly U.S. government may once again strengthen regulations on the cryptocurrency industry. If the legislation related to developer protection in the CLARITY Act and the Blockchain Regulatory Certainty Act is rejected in favor of short-term business interests and the current regulatory environment, the industry may face adverse situations.Peter Van Valkenburgh indicated that the purpose of passing the CLARITY Act is to legally bind future governments rather than relying on the current government's attitude; without relevant legal protections, the cryptocurrency industry may be affected by enforcement discretion, policy changes, and uncertainty. According to his disclosure, the CLARITY Act has been stalled in the Senate due to banks, cryptocurrency companies, and legislators failing to reach consensus on key terms, including whether to allow stablecoin yields. The bill covers a registration framework for cryptocurrency intermediaries, digital asset regulation, and token classification, among other topics.Furthermore, in the absence of legislative clarity, future government departments may strengthen enforcement against developers of privacy tools, viewing them as unregistered money transmission entities, while existing regulatory interpretive guidance may also be revoked. Previously, former SEC Chairman Gary Gensler faced criticism from the industry for promoting policy through enforcement actions and settlements with cryptocurrency companies rather than through formal rulemaking. Since he stepped down on January 20, 2025, the SEC has withdrawn several long-standing enforcement cases against cryptocurrency companies and issued more lenient regulatory guidance.

U.S. Senator Cynthia Lummis stated that the CLARITY Act, after its latest revision, will provide "the strongest protection" for DeFi and developers. This response addresses concerns raised by crypto lawyer Jake Chervinsky regarding the developer liability provisions in the draft, noting that bipartisan adjustments have been made to strengthen legal protections for non-custodial software developers.However, Chervinsky pointed out that the current draft's definition of funds transfer may still expose some DeFi developers to liability risks, as the relevant provisions have not been fully clarified. Reports indicate that the latest revised version of the bill has not yet been made public and is expected to advance to the Senate Banking Committee for review in April.

Ripple CEO Brad Garlinghouse stated that the company expects to achieve a record first quarter driven by mergers and acquisitions, and mentioned that it has invested approximately $4 billion in the crypto ecosystem, including the acquisition of Hidden Road for $1.25 billion and the acquisition of GTreasury for about $1 billion.He also pointed out that the progress of digital asset legislation in the United States is slower than expected, with the CLARITY Act potentially being delayed from its original plan of April to May, and called for avoiding excessive politicization of regulation that could impact industry development.

On Tuesday morning, US stocks saw the issuer of USDC, Circle (CRCL), drop by as much as 18%, while the crypto platform Coinbase (COIN) fell by about 8%. CoinDesk reported that the latest draft of the U.S. Clarity Act aims to restrict rewards on stablecoin balances, including prohibiting rewards for passive stablecoin balances and banning structures that are "economically equivalent to interest."Mizuho analyst Dan Dolev stated that the draft may prohibit payments of earnings solely for holding stablecoins and limit any practices that make the program equivalent to bank deposits in any way. The report mentioned that the GENIUS Act previously prohibited issuers from directly paying earnings to users, but issuers and platforms arranged rewards through methods such as distributing earnings from reserve assets; among them, Circle earns interest on the assets backing USDC and shares it with Coinbase, which uses this to provide rewards to users.Keyrock digital asset researcher Amir Hajian noted that the latest draft of the Clarity Act points to the aforementioned "earnings penetration" model by prohibiting arrangements that are "economically equivalent to interest." Additionally, USDT issuer Tether announced that it has hired one of the "Big Four" accounting firms to conduct a comprehensive audit of its USDT reserves. The report also pointed out that this drop occurred after Circle's stock price had risen by 170% since early February, with Clear Street analyst Owen Lau suggesting that the market reaction may be excessive; market participants are also factoring in expectations of interest rate hikes.

According to CoinDesk, cryptocurrency industry practitioners saw the latest provisions regarding stablecoin yields in the revised version of the Senate's "Digital Asset Market Clarity Act" during a closed-door review meeting on Capitol Hill on Monday. The initial impression is that the relevant language is too narrow and not clear enough.The new provisions were announced last Friday by Senators Angela Alsobrooks and Thom Tillis. According to a person familiar with the current draft, the new provisions will prohibit earning yields solely from holding stablecoins, while restricting any practices that equate the program with bank deposits, and setting further limitations on other potentially allowed activities, with the specific identification mechanism for activity-based stablecoin rewards still unclear.This compromise stems from the lobbying struggle between the cryptocurrency industry and the banking sector: the banking industry insists that stablecoin rewards should not be similar to interest-bearing bank deposits, arguing that such competing products could harm the banking sector and suppress lending. The final compromise allows for reward programs based on user stablecoin activities but prohibits rewards based on balances.The closed-door review aims to push the Senate Banking Committee to schedule a hearing, which is an important step for the bill toward a full Senate vote. A similar version of the "Clarity Act" was passed in the House of Representatives last year, and another version has also passed the Senate Agriculture Committee's markup process. The advancement of the bill still faces other obstacles: all parties need to reach an agreement on the DeFi regulatory framework, and Democrats insist on including provisions that prohibit senior government officials from profiting personally from the cryptocurrency industry, a provision clearly targeting President Trump.