US Senate Blocks CLARITY Act to Protect Bank Profits, Says Ripple's Former CTO
Ripple's former CTO David Schwartz has spoken out about the failure of the CLARITY Act in the US Senate, suggesting that it was blocked to protect bank profits.
Schwartztz pointed to a statement by Senator Josh Hawley, who voted against the bill despite its supporters claiming it would benefit regional economies. Hawley had expressed concern that allowing yield-bearing stablecoins could lead to a mass outflow of deposits from small banks in Missouri, depriving local farmers of capital for loans.
Schwartztz responded by saying that Hawley 'said the quiet part out loud' and that it was indeed about protecting bank profits. He argued that the bill would not have reduced the ability of banks to make loans, but rather led to a new digital ecosystem where investors could lend directly to the real economy on market terms.
The failure of the CLARITY Act comes as regulatory pressure continues to affect Ripple investment products in the US. The Securities and Exchange Commission (SEC) has postponed approval of Teucrium's 2x Short Daily XRP ETF, which is designed to profit from a decline in the token's price, until October 11 for the 19th time.