Following the US GENIUS Act, there are new developments regarding the highly anticipated Clarity Act (CLARITY), a bill that will regulate the cryptocurrency market.
The release of the draft text, which was expected this week, has been postponed. This development comes amid intense ongoing negotiations between representatives of the cryptocurrency sector and traditional finance.
While the Clarity Act remains a major topic of discussion in the US, Coinbase has issued a new statement.
Speaking to Fox Business, a US media outlet, Coinbase Chief Legal Officer (CLO) Paul Grewal stated that they are close to reaching an agreement regarding stablecoin interest payments, a major point of contention under Clarity.
“Despite the debates surrounding stablecoin yields, the bill is moving forward. I think we’re very close to an agreement.”
Grewal argued that the issue of stablecoin interest rates should not be confused with other challenges facing the banking sector.
He stated that banks have expressed concerns about potential rapid deposit outflows if stablecoin interest rates were allowed, but they have not provided concrete evidence to support these concerns.
Grewal expressed optimism that the CLARITY bill aligns with the Trump administration’s pro-crypto policies and said he expects the congressional process to move forward soon.
The US banking sector is lobbying for the Transparency Act to include a provision preventing crypto platforms from offering stablecoin returns on idle balances. Banks argue that cryptocurrency companies should be regulated on the same principles as traditional institutions and that allowing stablecoin returns could lead to a significant outflow of deposits from banks.
In contrast, Coinbase and its CEO Brian Armstrong have opposed various versions of the Clarity Act that would limit the payment of interest on stablecoins. Armstrong argues that such restrictions would stifle innovation in the U.S. and harm consumers.
*This is not investment advice.