Following the unsuccessful markup of the long-awaited crypto market Structure bill (CLARITY Act) by the Senate Banking Committee, the Senate Agriculture Committee unveiled a new draft of the bill, with a scheduled markup session for Tuesday, January 27.
Stablecoin Yield Regulations Excluded
The Agriculture Committee’s version of the bill primarily addresses regulations under the Commodity Futures Trading Commission (CFTC), which would gain expanded authority to regulate cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH).
In contrast, the Senate Banking Committee’s section of the legislation focuses on the Securities and Exchange Commission (SEC) and its oversight. Notably, the Agriculture draft allocates $150 million to support the CFTC in the implementation of the proposed law.
Market expert James Murphy reviewed the key provisions of the new draft and expressed optimism about its implications. He highlighted that the bill creates a pathway for decentralized finance (DeFi) to avoid CFTC regulation, providing important protections for developers and specific service providers from liability.
The Senate Agriculture Committee’s draft also excludes any regulations concerning stablecoin yields. This decision is significant, particularly as it addresses a critical provision that resulted in Coinbase (COIN) withdrawing its support for the Banking Committee’s version of the bill last week.
The Banking Committee’s version of the CLARITY Act aims to limit the yield that stablecoin platforms can offer. While banks support this approach due to concerns about deposits potentially flowing out, crypto firms oppose it, arguing that such restrictions hinder competition.
In contrast, the Agriculture Committee bill seeks to exempt stablecoins from CFTC regulations and relies on existing frameworks like the already passed stablecoin bill, or GENIUS Act, which mandates that stablecoins be fully backed.
Banking Committee Delays Crypto Bill’s Consideration
Senate Agriculture Chair John Boozman expressed appreciation for the collaborative efforts among lawmakers, particularly mentioning Senator Cory Booker and his staff for their contributions to consumer protections and CFTC authority.
Despite the remaining differences in fundamental policy issues with its Democratic counterpart, the Committee’s chair emphasized the importance of moving the bill forward:
While it’s unfortunate that we couldn’t reach an agreement, I am grateful for the collaboration that has made this legislation better. It’s time we move this bill, and I look forward to the markup next week.
But amid the broader cryptocurrency industry’s optimism surrounding the Agriculture Committee’s version of the market structure bill, the timeline for advancing the overall legislation remains uncertain.
Bloomberg reported that the Senate Banking Committee is expected to delay consideration of its own portion of the bill, which could push discussions into late February or even March.
Featured image from OpenArt, chart from TradingView.com
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