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There is finally some clarity in the Clarity Act, a piece of legislation expected to pave the way for crypto.
The head of legal affairs at Coinbase expects the Clarity Act to pass by the end of the summer, now that banks and crypto companies have reached an agreement on stablecoin rewards. Coinbase took action in January, when CEO Brian Armstrong wrote on X that no bill is better than a bad bill. He pointed out that banks are trying to close off competition from crypto competitors by preventing them from offering rewards to customers for holding stablecoins on their platforms. Banks say the system works very similarly to traditional savings accounts.
Now, Armstrong’s phrase, “Mark it up,” means to send it to the Senate Banking Committee for a hearing known as a markup. The revised Clarity Act allows customers to earn rewards for activities such as trading or placing, but not for allowing stablecoin to remain in their accounts.
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A Warm Wall Street Welcome
The progress of this act through the Senate raised the hopes of investors. Shares of stablecoin developer Circle, which reports earnings today, rose 20% shortly after the deal came out. Coinbase, the main platform that distributes Circle’s USDC coin, jumped more than 6%. Bitcoin, meanwhile, broke $80,000 for the first time since January.
By getting approval from central banks and regulators, crypto companies can start working with Wall Street to integrate blockchain technology into traditional financial structures:
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Circle’s SVP of sales said at the Consensus Miami annual crypto conference last week that stablecoins can be a part of digital payments in a way that users may not even notice. Stablecoins can be used to make transactions faster and cheaper than traditional payment methods. Chainalysis expects the number of on-chain stablecoin transactions to match the off-chain of Visa and Mastercard sometime in the 2030s.
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The passage of the Clarity Act may make more traditional financial institutions dependent on the exchange by supporting stablecoin payments, partnering with crypto companies, or issuing their own stablecoins.
New Look: Proponents of the Transparency Act expect it to help change crypto from jeans and a hoodie to a suit and tie. And at Consensus Miami, Binance’s CMO likened the time to crypto moving from its Prohibition-era phase to an infrastructure-building phase. Stablecoins are a very popular part of the crypto ecosystem for regulators and Wall Street, and can be a gateway to other parts of the crypto-verse that are worth considering.
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