White House Review Puts CLARITY Act Progress at Critical Juncture
The White House is set to review a bipartisan proposal aimed at regulating the US cryptocurrency market this weekend, which could be a turning point for the CLARITY Act.
The bill, which has already passed the Senate Banking Committee with a 15-9 vote, aims to define the limits of SEC and CFTC authority over crypto assets and create a comprehensive market structure for the sector.
A compromise reached in stablecoin regulation restricts interest-like payments based solely on holding tokens, while allowing rewards linked to transactions, payments, loyalty programs, or platform usage. This attempt to strike a balance between banks' concerns about deposit outflows and crypto companies' demands to maintain their reward programs.
However, the bill's progress in the Senate could be halted again if agreement on ethical provisions cannot be reached. The proposal drafted by Republican Senator Thom Tillis and Democratic Senator Ruben Gallego would authorize state attorneys general to prosecute federal officials if the Justice Department fails to enforce ethics and conflict-of-interest rules.