Goldman Sachs Backs Proposed Law to Regulate Digital Assets

Goldman Sachs CEO David Solomon has expressed support for the Digital Asset Market Clarity Act (CLARITY Act), a proposed law designed to establish a consistent regulatory framework for digital assets. The bill, which would require exchanges and brokers to register with either the Securities and Exchange Commission (SEC) or Commodity Futures Trading Commission (CFTC), aims to provide clarity on regulatory jurisdiction and enable regulated entities to enter the fray.

In an interview, Solomon stated that he is 'very supportive of getting done' the legislation, which would allow institutions to participate more fully in the digital asset economy. He emphasized the need for a stable market structure to facilitate broader engagement with digital assets beyond spot trading of Bitcoin and Ether.

The CLARITY Act would also impose reporting and transparency obligations on crypto market makers and decentralized finance (DeFi) platforms, as well as restrictions on crypto exchanges, wallets, and protocols offering rewards in the form of stablecoins. Goldman Sachs's support for the bill highlights the firm's position as a dominant player on Wall Street, with considerable institutional client outreach.

The bill would enable banks, asset managers, broker-dealers, and insurance companies to offer crypto custody, lending, settlement services, and tokenized products, minimizing differences between jurisdictions and reducing compliance costs. However, it is essential to note that the CLARITY Act would not make every token legitimate or remove all regulatory scrutiny from the crypto industry.