According to David Sacks, the White House’s artificial intelligence (AI) and crypto Czar, the long-awaited crypto market structure bill, the CLARITY Act, which aims to define how regulatory bodies will oversee cryptocurrency markets, is reportedly closer to passing.
Markups For Crypto Market Structure Bill Set For January
In a recent post on the social media platform X (formerly Twitter), Sacks shared insights from a fresh meeting with Senate Banking Committee Chair Tim Scott, indicating that a markup for the CLARITY Act is slated for January.
The CLARITY Act is designed with a core framework that classifies digital assets into three categories: digital commodities, overseen by the Commodity Futures Trading Commission (CFTC); investment contract assets, regulated by the Securities and Exchange Commission (SEC); and permitted stablecoins.
This structure aims to establish distinct regulatory roles for the CFTC and SEC, require registration for cryptocurrency exchanges, define Qualified Digital Asset Custodians (QDACs) with strict key management protocols, and introduce anti-money laundering (AML) and know-your-customer (KYC) rules.
However, the bill has faced delays over recent months, primarily due to an extended US government shutdown and ongoing negotiations between Democratic and Republican lawmakers.
As recent reports by Bitcoinist have indicated, Democrats are advocating for additional time to discuss various crucial issues, including market integrity, financial stability, and ethical considerations surrounding President Trump’s family’s business dealings in the crypto space.
Despite these hurdles, a spokesperson for Chair Scott emphasized the significant progress made by the Senate Banking Committee in creating a robust regulatory framework.
Meanwhile, the crypto industry is also striving to address concerns regarding the recently passed GENIUS Act, which includes provisions that could exert further limits on stablecoins.
Contention Grows Over GENIUS Act
A letter led by the Blockchain Association, signed by over 125 industry players, criticized attempts to reinterpret and expand the existing prohibition on interest linked to stablecoins within the GENIUS Act.
Signed into law by President Trump in July, the GENIUS Act aims to establish a regulatory framework for dollar-backed digital tokens, which are widely known as stablecoins. The act contains a provision that prevents stablecoin issuers from offering “any form of interest or yield.”
This aspect has ignited a contentious debate between the crypto and banking sectors regarding the extent of the interest prohibition and whether adjustments are necessary.
Banking representatives argue that the prohibition on interest should extend to other entities that provide rewards to stablecoin holders, labeling any attempt to exclude them a “loophole” that contradicts the law’s original intent. They also lobbying Congress to revise the GENIUS provisions as part of the crypto market structure bill.
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