The debate over DeFi and stablecoin reward provisions in the CLARITY Act is at risk of holding the bill back as banking and crypto stakeholders push competing agendas.
US Senator Cynthia Lummis reportedly expects the US Senate Banking Committee to delay its hearing on crypto market structure legislation after Coinbase withdrew support for the bill.
There were already some murmurs of a CLARITY Act Senate markup delay on Wednesday, which were heightened following an X post from Bloomberg reporter Steven Dennis on Wednesday night, stating:
“Lummis tells me her recommendation and expectation is that the markup be pulled for now. It’s Banking Chair Tim Scott’s call.”The Senate markup is scheduled for Thursday at 10:00 am Eastern Time.Cointelegraph reached out to Scott’s office for comment, but didn’t receive an immediate response.
Lawmakers have been consulting with members of the banking and crypto industries over provisions of the CLARITY Act for several weeks.
Coinbase flags multiple issues with latest text
However, Coinbase publicly pulled its support for the bill on Wednesday, arguing the latest text was unfavorable to the industry.
In addition to killing stablecoin rewards, Coinbase CEO Brian Armstrong flagged concerns over restricting tokenized stocks, the government having unlimited access to financial records, and the US commodities regulator receiving less authority over the crypto markets than initially anticipated.
”This version would be materially worse than the current status quo. We’d rather have no bill than a bad bill. Hopefully we can all get to a better draft. “
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A lot is on the line for both crypto and the banks
Passing of the bill without favorable provisions could significantly impact Coinbase’s balance sheet, having made $247 million from stablecoin revenue in Q4 in addition to $154.8 million from blockchain rewards.
Banking industry advocates say allowing stablecoin rewards could hit them even harder, with the Treasury Department estimating last April that widespread stablecoin adoption could draw $6.6 trillion from the traditional banking system.
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