Treasury Secretary Pushes Clarity Act

Noting that nearly one in six Americans now own digital assets, Treasury Secretary Scott Bessent on Thursday pushed the Senate to pass the crypto-regulating Clarity Act as soon as possible.

In a Wall Street Journal Op-Ed, Bessent argued that with Senate floor time getting scarcer by the day, “now is the time to act.” Congress will soon be sidetracked by the midterm elections, and the Trump Administration wants the Clarity Act passed before a potential change of control in the House and Senate, where the GOP is expected to lose a significant number of seats.. 

Republicans have warned the crypto industry that it will get a better deal from a Republican-controlled Congress.

The Act is being held up by several issues, the most controversial of which is the question of whether yield — interest — can be offered on stablecoins. The stablecoin-regulating GENIUS Act already prohibits issuers from offering yield, but other firms, such as the exchange Coinbase, want to be able to offer bitcoin holders yield. 

Stablecoin yield is heavily opposed by banks, particularly small banks, which fear stablecoin yield accounts would steal away depositors and hurt their ability to make loans. As Modern Consensus reported yesterday, the White House Council of Economic Advisers (CEA) released a report finding that banning yield on stablecoins would have almost no effect on banks.

In March, two U.S. Senators, Republican Thom Tillis and Democrat Angela Alsobrooks, came up with an agreement that would ban stablecoin yield on bank account-style passive holdings but permit it on active stablecoin use. That reportedly had White House support.

That deal may be thrown into confusion by an April 8 report by the White House Council of Economic Advisors that argued banning stablecoin yield would do little for banks while depriving consumers of better return on their savings. That is roughly the crypto industry’s position on the matter.

Noting that the market cap of crypto has fluctuated between $2 trillion and $3 trillion this year, Bessent pointed out that “major financial institutions have launched or sought approval for crypto-related products [and that] blockchain infrastructure has assumed a growing role in payments, settlements and the exchange of real-world assets.”

He added, “it is a technology the world is adopting regardless of which nation chooses to lead.”

That leadership, Bessent argued, requires passage of the Clarity Act.

Industry leaders seem to agree. After Bessent tweeted “It is time for @BankingGOP to hold a markup and send the CLARITY Act to President Trump’s desk,” Ripple CEO Brad Garlinghouse concurred with a simple message: “Progress > Perfection.”

https://x.com/bgarlinghouse/status/2042278059391492605