TL;DR:
- The Senate Banking Committee vote is scheduled for this Thursday, before the Congressional recess for the midterm elections.
- Representatives of the traditional banking sector, through the ABA, have formally requested to restrict stablecoin rewards offered by crypto companies.
- A recent agreement between Senators Cynthia Lummis and Chuck Grassley seeks to define the criminal liability of developers of privacy tools in DeFi.
Next Thursday, the United States Senate Committee will put the market structure bill, known as the Clarity Act, to a vote. This legislation, which has been the subject of negotiations for months, seeks to formalize the legality of most digital asset activities in the country.
Disputes Over Stablecoin Yield
The friction is centered on pitting the cryptocurrency industry against the traditional banking lobby. Banking institutions are pushing to include language that would prohibit platforms like Coinbase from offering yields on dollar-pegged stablecoins.
The American Bankers Association (ABA) suggests in its report that these rewards could reduce user reliance on traditional savings accounts, which offer lower interest rates. Last Sunday, the organization sent a letter urging senators to protest against what they call the “stablecoin loophole” before the May 14 session.
For their part, companies in the sector argue that these programs were already contemplated in previous legislation called the GENIUS Act. Senators Thom Tillis and Angela Alsobrooks presented a compromise proposal this month that would allow rewards under certain specific conditions, although the banking sector rejected the measure last Friday, citing the existence of technical loopholes.
Debates on Ethics and DeFi Regulation
The inclusion of ethical clauses is presented as another critical obstacle to the regulation’s progress. Official documentation of the process indicates that Senate Democrats are demanding restrictions that prevent public officials from launching or promoting their own crypto products while holding government positions.
Regarding these ethical issues, Banking Committee Chairman Tim Scott believes they are outside his committee’s jurisdiction and should be addressed directly on the Senate floor. However, senators like Ruben Gallego have stated that next Thursday they could vote against the Clarity Act if this language is not integrated starting from the markup phase.
In the field of decentralized finance (DeFi), a significant breakthrough was reported after months of stagnation. Senator Cynthia Lummis announced an agreement this Monday with Chuck Grassley regarding the Blockchain Regulatory Certainty Act (BRCA), which is linked to the main project.
This section of the law aims to exempt software developers from being prosecuted as illegal money transmitters if they do not have direct control over funds. The compromise proposal adds a clarification on the level of intent required to face criminal charges, a measure that has already received the go-ahead from various defenders of the DeFi ecosystem.
If a bipartisan consensus is not reached this Thursday, the Clarity Act could be approved solely with Republican votes. While this scenario would allow the bill to move forward, industry leaders recognize that at least seven additional Democratic votes are needed on the Senate floor to ensure its final enactment.
The most immediate milestone for this regulatory framework will be the Banking Committee markup session scheduled for the morning of Thursday, May 14, where the final text that will reach the Senate floor will be defined.
