The anticipated Crypto Market Structure bill, or more specifically the CLARITY Act, designed to provide essential regulatory clarity for digital assets in the United States, is approaching critical dates in the Senate. However, it faces significant complexities related to stable coin yield, conflicts of interest, and decentralized finance (DeFi).
Senate divided on crypto market structure bill
Legal expert and legal director of Variant Jake Chervinsky, reports that the Senate be divided into two committees: banking, which deals with the securities law aspect, and agriculture, responsible for the raw materials law part.
Both committees released drafts of their work this fall, with the next step being markup, a process in which hearings will be held to vote on amendments before sending the bill to the Senate for a full vote.
However, both committees are cautious and unlikely to proceed with the markup until they resolve ongoing disputes. Among these, three important issues stand out.
The first major concern concerns stablecoin yield. In the GENIUS Act, banks pushed to ban interest payments, meaning that stablecoin issuers cannot offer their holders any form of interest or return.
Although the current ban prevents direct yield payments to holders, it does not cover rewards other than yield or yields provided by third parties. Banks consider this loophole a “loophole” and are advocating for broader restrictions to be included in the market structure bill.
Conflicts of interest and DeFi regulations block progress
The second problem concerns conflicts of interest. Some Democratic senators have indicated they would not support the market structure legislation unless it includes provisions that prevent the president’s family from conducting business in the crypto space.
The third problem, perhaps the most crucial, concerns DeFi. It is important to note that market structure legislation primarily concerns centralized platforms that exercise custody of user funds and transactions.
Chervinsky believes the bill should primarily focus on protecting DeFi, buttraditional finance Stakeholders (TradFi) have pushed Congress to classify virtually all entities in the crypto industry (developers, validators, and others) as intermediaries.
The expert emphasized that the success of any market structure bill depends on ensuring strong protections for developers, as the viability of the crypto industry depends on their contributions.
Given the complex nature of these issues and the fast-approaching holidays, Chervinsky noted that it is possible that discussions on market structure could extend into January.
The Senate markup is scheduled for December 17 and 18
Market analyst MartyParty provided another update on Dec. 4, indicating that the bipartisan Digital Asset Market Structure bill is gaining significant momentum in Congress, with a markup session in the Senate Banking Committee tentatively scheduled for Dec. 17-18, just before the holiday break.
If successfully passed, he says the bill could establish clearer pathways for tokenized real-world assets (RWA) and mitigate “unbanking” risks, paving the way for compliant trading and potentially boosting market volumes following Commodity Futures Trading Commission (CFTC) approvals for spot crypto trading.
This “regulatory convergence” is seen as a catalyst that could generate liquidity and energize the next bull market, reinforcing President Trump’s vision of the United States emerging as the “crypto capital of the world.”
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