<\/p>\n
The U.S. took a big step closer to a regulated digital asset market following a Senate committee vote, but President Trump\u2019s crypto profiteering could yet derail this train.<\/p>\n
On Thursday, the Senate Banking Committee voted to advance its Digital Asset Market Clarity Act (CLARITY) following two-plus hours of often heated debate over dozens of proposed amendments filed earlier this week. Crucially, the vote was 15-9 in favor, with two Democrats\u2014Michelle Alsobrooks (D-MD) and Ruben Gallego (D-AZ)\u2014breaking ranks to vote \u2018aye\u2019 alongside all 13 Republican committee members.<\/p>\n
However, both Alsobrooks and Gallego stated for the record that their committee votes were no guarantee of similar approval when CLARITY reaches the floor for a vote by the full Senate. There, it will require 60 votes to pass, meaning at least seven Dems would have to vote in favor, assuming all 53 GOP senators vote in lockstep.<\/p>\n
Following the vote, Alsobrooks acknowledged that \u201cthe digital revolution is upon us \u2026 and the truth is this digital revolution is happening with us or without us.\u201d But \u201cmy vote today is a vote to keep working in good faith. It does not mean that I\u2019ll be voting for the passage of the CLARITY Act on the floor because we still have so much work to do.\u201d<\/p>\n
Alsobrooks, who previously helped craft CLARITY\u2019s bipartisan stablecoin \u2018rewards\u2019 compromise with colleague Thom Tillis (R-NC), singled out the committee\u2019s failure to agree on \u201can ethics agreement that \u2026 would apply not only to the President and Vice-President, but to all of (Congress).\u201d A former prosecutor, Alsobrooks, also referenced the need to \u201caddress law enforcement\u2019s concerns about financial crimes\u201d involving decentralized finance (DeFi) platforms. (Alsobrooks later tweeted a summary of her post-vote statement.)<\/p>\n
Gallego signaled his intention to vote in favor of CLARITY midway through the markup session, saying that he wanted to be clear that \u201cmy vote here does not guarantee a vote on the floor.\u201d Gallego said \u201cserious bipartisan negotiations\u201d had allowed \u201cincredible progress\u201d and \u201cnarrowed the gap on many of the outstanding issues,\u201d but lots of work remains ahead.<\/p>\n
Gallego noted that \u201cperhaps the toughest issue of all\u201d facing the Senate was \u201can agreement on an ethics guardrail for elected officials, all elected officials. We need real enforceable standards, what is and is not acceptable for someone who holds the public trust and shouldn\u2019t be able to profit off an industry that they enforce or regulate. But we will continue to work.\u201d<\/p>\n
It\u2019s worth noting that both Alsobrooks and Gallego previously stated that CLARITY wouldn\u2019t get their committee vote absent strong ethics language. So it remains to be seen whether or not these latest statements regarding their floor vote intentions are more than just public posturing.<\/p>\n
CLARITY still has a long and winding legislative road ahead before it gets to President Trump\u2019s desk for his signature. First, it must be reconciled with the Senate Agriculture Committee\u2019s version of the bill, which was approved in January.<\/p>\n
From there, CLARITY travels to the House for alignment with that chamber\u2019s version, which the House approved last summer. And if House members make alterations to the Senate-approved version, it must return to the Senate for yet another vote before finally making its way to the White House.<\/p>\n
It was the best of times, it was the worst of times<\/strong><\/p>\n Reaction from the crypto sector was immediate and effusive. Brian Armstrong, CEO of the Coinbase (NASDAQ: COIN) exchange, called it \u201ca historic day for crypto and for the future of digital assets in America.\u201d Coinbase shares opened Thursday\u2019s trading at $201.25 but briefly soared above $222 before retreating somewhat to close at $212.01 (+5%).<\/p>\n USDC stablecoin issuer Circle (NASDAQ: CRCL) also got a brief boost after starting the day at $126.57, then falling below $119, then surging to over $132, before closing down 2.1% to $123.88. Regardless, CEO Jeremy Allaire tweeted that he was \u201cthrilled\u201d to see CLARITY making progress.<\/p>\n Industry association The Digital Chamber praised\u00a0Banking members for their hard work but said it was \u201ccritical\u201d that the upcoming Banking\/Ag reconciliation doesn\u2019t water down any of CLARITY\u2019s crypto sector perks. Blockchain Association CEO Summer Mersinger called the vote \u201ca defining moment for American leadership in the future of finance,\u201d while agreeing that \u201cimportant work still remains.\u201d<\/p>\n Crypto Council for Innovation CEO Ji Kim called the vote \u201ca decisive turning point\u201d in America\u2019s digital asset future, adding that he was struck by \u201cthe conviction on both sides\u201d of the political spectrum to advance digital asset legislation.<\/p>\n The Coinbase-funded astroturf group Stand with Crypto (SwC) tweeted its thanks to Banking members for their \u201cleadership and dedication\u201d in advancing CLARITY. SwC, which earlier in the week issued a veiled threat that it would be \u2018scoring\u2019 committee members on their votes, went on to \u201curge Senate leaders to bring the Clarity Act to the floor for a final vote.\u201d You know, or else.<\/p>\n On the other side of this divide, a coalition of banking associations issued a joint statement following the vote that said: \u201cestablishing a regulatory framework around digital assets (is) a goal the banking industry supports.\u201d But the banks want CLARITY \u201cstrengthened further by tightening the prohibition on interest-like rewards for holding stablecoin while also allowing certain payment stablecoin transactions and activities to generate rewards \u2026 In that spirit, we will continue to work with senators in good faith to address this issue and improve the bill and its chances on the Senate floor.\u201d<\/p>\n Amanda Fischer, a former Securities and Exchange Commission (SEC) chief of staff and currently director at the Better Markets consumer watchdog group, tweeted that \u201cafter years of industry insistence that crypto wasn\u2019t under the jurisdiction of the SEC, (CLARITY) says: \u2018nevermind, jk, it is!\u2019 The law then airlifts certain securities out of the SEC regime & airdrops them into the CFTC (Commodity Futures Trading Commission).\u201d<\/p>\n But as Fischer points out, \u201cthe SEC regime is designed for retail investors & the stock market, the CFTC regime is designed for institutional participants in the commodity markets.\u201d Meaning small-time crypto buyers may not have much recourse in the wake of the failures, bankruptcies, and rug-pulls that almost certainly lie ahead.<\/p>\n As for the digital asset market\u2019s reaction, the BTC token began the day at a little over $79,000, before surging to over $82,000 following the vote. But the euphoria proved short-lived, and the price was soon struggling to stay above $81,000, suggesting that much of the impact of the vote was already baked in. Other prominent tokens, including the Ethereum network\u2019s ETH and Solana\u2019s SOL, followed smaller but similar surge\/retreat patterns.<\/p>\n Back to the top \u2191<\/em><\/p>\n Does Trump look better in pinstripes or prison stripes?<\/strong><\/p>\n Banking Committee members proposed over 100 amendments to CLARITY ahead of the markup session, but only a couple of dozen got an airing on Thursday. The TL;DR is that none of the Dem-sponsored amendments were approved, while the GOP-sponsored amendments that weren\u2019t withdrawn all passed.<\/p>\n \n<\/p>\n <\/p>\n <\/p>\n <\/p>\n The meeting nearly went off the rails straight out of the gate after ranking member Elizabeth Warren (D-MA) protested that chairman Tim Scott (R-SC) had \u201cruled out more than a dozen amendments because of \u2018procedural requirements.\u2019\u201d\n<\/p><\/div>\n<\/div>\n These sidelined amendments addressed several contentious CLARITY subjects, including community bankers\u2019 fears of deposit flight if alleged loopholes on stablecoin \u2018rewards\u2019\u00a0aren\u2019t plugged, as well as law enforcement\u2019s concerns regarding their ability to prosecute crimes involving digital assets if DeFi developers receive broad legal immunity.<\/p>\n Scott replied that he\u2019d rejected only the amendments with the \u201cmost egregious\u201d technical failures, although the chief sin of these amendments was that they addressed the CLARITY version that was issued last Friday, rather than the tweaked version that came out this week. Jack Reed (D-RI) wasn\u2019t buying it, accusing Scott of \u201carbitrarily eliminating\u201d amendments he didn\u2019t want to tackle publicly.\u00a0<\/p>\n A far hotter exchange followed Chris Van Hollen (D-MD) advocating on behalf of his amendment that would \u201cprevent conflict of interest and self-dealing by the President or members of the House or the Senate.\u201d Van Hollen said, \u201cWe have all seen the President and members of his family involved in corrupt crypto ventures and various crypto scams.\u201d<\/p>\n Van Hollen singled out World Liberty Financial (WLF) for generating \u201cbillions in profits\u201d for the Trump family \u201cthrough corrupt deals with members of the UAE royal family.\u201d Van Hollen also referenced the $TRUMP and $MELANIA memecoins that \u201callowed Trump to rake in hundreds of millions if not more\u201d while those who purchased the tokens collectively lost billions.<\/p>\n Van Hollen didn\u2019t mince words, saying, \u201cThe way the scam works is that whether retail investors win or lose, Trump is the house at the casino. He always wins.\u201d<\/p>\n Bernie Moreno (R-OH) pushed back on Van Hollen\u2019s amendment, saying it called for criminal penalties and therefore it was an issue best handled by the Judiciary committee, not Banking.<\/p>\n But Moreno also said that he respects the legal principle of being considered innocent until proven guilty, then criticized Van Hollen for making \u201cconclusive comments\u201d about Trump\u2019s alleged guilt. Moreno said that \u201cto say with no knowledge that (Trump) is committing a crime is a disgrace,\u201d and he bemoaned Van Hollen making \u201cad hominem attacks against the President.\u201d<\/p>\n Van Hollen retorted that the WLF\/UAE deal \u201chas all the markings of a corrupt deal,\u201d but Scott countered that \u201cMoreno\u2019s point is spot on\u201d and \u201cwe should be very careful in this context.\u201d Van Hollen said his amendment \u201cdoesn\u2019t pass judgment\u201d on Trump, but Scott cut him off, saying \u201cyour comments did, not the amendment.\u201d And with that, Scott halted further debate and called for a vote on the amendment (which Van Hollen lost).<\/p>\n The subject came up again as Raphael Warnock (D-GA) withdrew his amendment to enact greater consumer\/investor protections. Warnock commented that \u201cthe President\u2019s self-dealing with digital assets is pure corruption and everyone in this room knows that.\u201d<\/p>\n Warnock noted that Trump has pushed for CLARITY\u2019s passage, but \u201che should decide whether he wants to get this done or whether he wants to continue to enrich his family.\u201d Warnock said Democrats \u201chave made it clear since the beginning of this process that we will not accept a crypto bill that allows the president\u2019s crypto corruption to continue.\u201d<\/p>\n Back to the top \u2191<\/em><\/p>\n US voters don\u2019t care about candidates\u2019 crypto stance<\/strong><\/p>\n Stand with Crypto plans to score senators\u2019 floor votes on CLARITY, and with crypto-focused political action committees (PAC) holding nearly $200 million to spend on November\u2019s midterm elections, crypto operators hope senators get the unsubtle message.<\/p>\n Typically, ads produced by the Coinbase-backed Fairshake PAC that either support one candidate or attack that candidate\u2019s opponent never mention crypto, blockchain, tokenization, or anything else that might inform viewers that the ad they\u2019re watching is paid for by crypto operators. A recent set of surveys goes a long way towards explaining why.<\/p>\n Crypto operators have long touted the alleged existence of \u2018crypto voters\u2019 in pressing for favorable regulatory\/legislative actions. But a new Politico survey released this week found that only 4% of Americans weigh a political candidate\u2019s stance on crypto when deciding whom to vote for.<\/p>\n The news didn\u2019t come as a shock to Sen. Lummis, who told Politico that the issue was \u201cstill too new\u201d for voters to care. Sen. Tillis agreed, saying voters \u201cdon\u2019t care\u201d about crypto, adding that \u201cfor people who grew up like me, I hope to God they\u2019re not talking about crypto right now. Get a savings and loan account and try and get some minimum guaranteed return, period.\u201d<\/p>\n Rep. Dusty Johnson (R-SD), a member of the House of Representatives\u2019 Agriculture committee, shares the view that \u201cmost voters don\u2019t care about digital assets. But those who do care a lot. It is a high-intensity issue.\u201d<\/p>\n Asked to choose from a list of \u201clegislative priorities\u201d they\u2019d like to see Congress tackle, just 18% of survey respondents chose \u201cestablishing rules (pro or con) for the cryptocurrency market.\u201d That ranks the issue fifth, while twice as many respondents chose \u201cprotecting consumers from financial fraud.\u201d<\/p>\n Asked whether the government \u201cshould crack down on the cryptocurrency industry, even if it becomes less profitable,\u201d 45% agreed, while 25% said the government \u201cshould take steps to legitimize crypto, even if that means less regulation of the industry.\u201d The remaining 30% didn\u2019t know which stance they favored.<\/p>\n As for that thorny \u2018ethics\u2019 issue, a majority (55%) of respondents believe \u201cpoliticians who write rules governing the crypto industry should not be allowed to hold personal investments in cryptocurrency.\u201d Just 18% found this situation acceptable.<\/p>\n Asked for their top three reasons why voters \u201chave not invested more in cryptocurrencies,\u201d 31% said \u201ctoo many scams and fraudulent schemes,\u201d 27% found it \u201ctoo volatile and unpredictable,\u201d 17% said \u201cthe people promoting it cannot be trusted,\u201d 15% said they \u201cdon\u2019t know how to use it or find it hard to use,\u201d 13% said it was because crypto \u201cis mainly used for illegal activity\u201d and 12% said they knew people who\u2019d \u201clost money on it.\u201d<\/p>\n On the less pejorative side of this question, 28% said they \u201chave no spare money to invest,\u201d 17% said they were \u201cnot interested in investing in general,\u201d while a mere 9% said they had \u201cno concerns about investing in cryptocurrency.\u201d<\/p>\n Asked whether the government should take action \u201cto legitimize cryptocurrencies as mainstream financial assets, 31% are against the idea versus 27% who support it. As for whether the government should invest its reserves into digital assets, 37% either oppose or strongly oppose, versus 23% who are in favor. Regarding the government issuing a central bank digital currency (CBDC), 25% are in favor, while 37% are opposed.<\/p>\n This latest survey builds on previous Politico polling that found a bipartisan majority of Americans think deep-pocketed special interest groups exert way too much influence on legislative matters. Other surveys have found that voters don\u2019t trust crypto operators with their money and don\u2019t trust Trump to oversee crypto matters.<\/p>\n Back to the top \u2191<\/em><\/p>\n Watch | Tokenization on Public Blockchain: Transforming RWAs and Finance<\/p>\n