US Treasury Secretary Wants CLARITY Act Passed

Key Insights

• Treasury Secretary wrote a Wall Street Journal opinion calling for the passage of the CLARITY Act.
• Bessent says regulatory clarity on crypto is crucial for economic security, which is also national security.
• The White House has also released a report on Stablecoin yield, discrediting fears of commercial banks as overblown.

The US Treasury Secretary Scott Bessent has described the Crypto market structure bill, also known as the CLARITY Act, as a matter of national security. Bessent shared this in a recent op-ed published in the Wall Street Journal.

According to the Op-Ed titled “Digital Asset Rules Need Clarity,” the passage of the CLARITY Act is crucial for the US to continue its leadership in the global financial markets.

Bessent Urges Congress to Pass Clarity Act

The Treasury Secretary urged Congress to pass the bill, noting that time is running out. According to him, the US government under President Donald Trump has sought to create clarity for the crypto sector with the 2025 Genius Act on stablecoins.

However, he noted that the lack of regulatory clarity on other aspects of crypto remains a major problem. One of the consequences, in his view, is how several crypto firms have moved to Singapore and Abu Dhabi, where there are clearer rules.

Interestingly, Bessent criticized crypto stakeholders that are opposing the CLARITY Act, calling them nihilists. According to him, the Act remains the only way for entrepreneurs to come back to the US.

He said:

“Though industry nihilists may argue otherwise, there is one way to give developers and entrepreneurs the comfort to reshore: durable law. Congress acted decisively with Genius, and the Clarity Act is the necessary next step.”

Bessent highlighted all the potential benefits of the CLARITY Act, noting that it will establish clear regulatory jurisdiction and registration requirements for crypto firms. The law will also define digital assets and distinguish them from securities.

He further stated that economic security, central to the CLARITY Act’s goal, is national security. Thus, he believes that Congress should take the decisive step to pass the law as it is needed to realize the potential of the Genius Act.

White House Report Finds Banning Stablecoin Yield Will Hurt Customers

Meanwhile, Bessent’s opinion comes the same day as the White House Council of Economic Advisers released a report on stablecoin yields. The report, which analyzed the potential impact of stablecoin yield on bank lending and deposit flight, discredited claims of its negative impact.

It found that banning the yield would not have much impact on boosting bank lending or deposits. Instead, it would have a greater impact on consumers, as they would lose out on the benefits of yield.

It stated:

“The conditions for finding a positive welfare effect from prohibiting yield are similarly implausible. In short, a yield prohibition would do very little to protect bank lending, while forgoing the consumer benefits of competitive returns on stablecoin holdings.”

The report discredits several claims opponents of stablecoin yield have been pushing, including the claim that it could affect commercial banks. Some of these include capital flight and increased lending costs.

Given how yield on stablecoins remains one of the contentious issues delaying the CLARITY Act, the new report could have an impact. Crypto journalist Eleanor Terrett noted that members of the Senate Banking Committee were calling for its release last month. This is one of the core committees deliberating on the CLARITY Act.

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