US Treasury Secretary Bessent’s Senate Testimony
US Treasury Secretary Scott Bessent stated during his testimony before the Senate Banking Committee that traditional banking and crypto products and services could become more intertwined in the future. In response to a question from Republican Senator Cynthia Lummis, he said they are working to include small and community banks in the digital asset revolution. This statement is seen as a critical step in the integration of the crypto sector with traditional finance.
Crypto and Traditional Banking Integration
Bessent emphasized that with the growth of the crypto sector, banks could seize new opportunities through stablecoins and other digital assets. For small banks, this means innovation in deposit management. In particular, leading assets like BTC detailed analysis could play a role in diversifying banks’ portfolios. However, integration requires managing volatility risks.
Support for the CLARITY Act Legislation
Bessent emphasized that progress without clear rules for the crypto sector is impossible and urged Congress to support the CLARITY Act market structure bill. He ironically suggested that market participants opposing the bill go to El Salvador. The bill aims to clarify stablecoin regulations and market structure. Regulations affecting derivative markets like BTC futures trading are expected.
Legislation Discussions and Crypto Firms’ Proposals
The CLARITY Act is stalled in the Senate Banking Committee due to bipartisan discussions. Issues such as restrictions on stablecoin yields and preventing deposit volatility are being debated. Crypto firms have proposed concessions like giving community banks a larger role in the stablecoin system. These developments may increase uncertainty in the BTC spot market, but clear rules will provide stability in the long term.
- Small banks are opening up to digital assets.
- CLARITY Act will regulate stablecoins.
- Integration carries volatility risk.
Source: https://en.coinotag.com/bessent-crypto-banking-will-transform
