White House Points Fingers at Democrats and Banks for Clarity Act Collapse

The White House's crypto adviser has placed blame for the failure of the CLARITY Act in the Senate on Democrats and the banking industry.

Patrick Witt, the White House's crypto adviser, said President Trump had been willing to accept conflict-of-interest provisions related to cryptocurrency. The provisions would have required the sale of crypto-related assets or their transfer into a blind trust, or allowed state attorneys general to take legal action if the federal government failed to properly enforce ethics rules.

The CLARITY Act aimed to establish a regulatory framework for the digital asset market. However, negotiations stalled over concerns about President Trump's potential conflicts of interest due to his crypto business dealings. Witt argued that Democrats turned this issue into a political matter and that opposition from the banking industry also contributed to the bill's failure.

The White House is shifting focus to federal regulators, including the US Securities and Exchange Commission, to work on a cryptocurrency regulatory framework after the Senate failed to advance the CLARITY Act. Witt said banks should press for related legislation if they see stablecoins as a threat to regional lenders.