Key Negotiations for the CLARITY Act This Week: Bank Pressure May Delay Vote to May

On April 20, the U.S. CLARITY Act enters a critical negotiation period this week, with the possibility of receiving the long-awaited committee review in April or delaying it until May depending on recent developments. The Senate Banking Committee will focus early in the week on the confirmation hearing for Federal Reserve Chair nominee Kevin Warsh. Following that, the committee must decide by Friday whether to notify the review of the bill in order to hold a vote during the week of April 27. Bank groups, represented by the North Carolina Bankers Association, are lobbying against the stablecoin yield restriction provisions in the bill, urging members to call Senator Thom Tillis’s office to request amendments. It is reported that industry groups are also reaching out to other committee members. After more than two months of negotiations, crypto firms and banks reached a compromise at the end of last month, which was generally satisfactory to the crypto industry. However, following a report from the White House Council of Economic Advisers that downplayed the risks of stablecoin yields to the banking system, calls for amendments from the banking sector have intensified. Patrick Witt, Executive Director of the White House Crypto Council, criticized banks on the X platform for further lobbying out of greed or ignorance. Senator Tillis proposed holding an in-person ‘crypto carnival’ meeting, which may extend the timeline. He emphasized that there are still issues to negotiate but expressed optimism about scheduling the review in the coming weeks. In addition to yield issues, the bill also needs to address ethical and DeFi-related provisions. The progress made this week will determine the fate of the bill, and the market is closely watching.