The United States Treasury Secretary Scott Bessent has urged Congress to pass the CLARITY Act without further delay, as Senate floor time is limited.
Summary
- Scott Bessent has urged Congress to pass the CLARITY Act quickly, warning that limited Senate floor time could stall progress.
- Debate over stablecoin yields has delayed the bill with banks warning of lending risks.
In an op-ed for The Wall Street Journal, Bessent stressed the importance of the legislation, especially as crypto use was rising across the United States. He highlighted that the crypto market had reached $3 trillion and that nearly one in six Americans now hold digital assets.
“To preserve it and rise to the challenge before us, Congress must pass the Clarity Act. Senate floor time is scarce, and now is the time to act,” he wrote.
Since passing in the House of Representatives in July last year, progress around the CLARITY Act has been delayed in the Senate as industry participants and bankers debated over how stablecoin yields should be treated.
Proponents of stablecoin yield argue that without such incentives, there would be reduced user participation and slower innovation. Bankers, meanwhile, are concerned that the practice could draw deposits away from traditional institutions and impact lending capacity.
White House economists have challenged these concerns in a recent report, where they assessed the impact on traditional lending. The economists found that banning yields on stablecoins could result in an $800 million annual welfare loss for users.
On the other hand, banks would see total US bank lending increase by only $2.1 billion, or just 0.02% of the $12 trillion market.
U.S. President Donald Trump has also backed the legislation, warning that delays risk pushing innovation to China and other jurisdictions.
He also accused banks of trying to hold the CLARITY Act “hostage” and undercut what he described as a “powerful Crypto Agenda.”